Your credit score may be falling even if you've paid all of your bills on time. There are numerous causes for this. Let's have a look major 3 reasons!
Paying credit card bills on time is key to excellent credit. Even if you do that, owing & using too much on credit cards can hurt your score.
To avoid a negative impact on your credit score, you should maintain a utilization ratio of 30 percent or below across all of your credit cards.
When you apply for a new credit card, your credit is checked to make sure you're not a dangerous borrower. A hard inquiry lowers your credit score by 5 to 10 points.
As a borrower, you could be seen as a high-risk borrower if you only have credit cards and no other sorts of loans in your credit mix.
Length of credit history affects credit score. If you've been opening new credit accounts and closing existing ones, your credit score could take a knock.
Therefore, it is generally advisable to keep older credit cards open, even if they aren't being used. The only exception to this rule is if you are charged an annual fee.