10 Reasons Your Credit Score May Have Worsened

Your credit score may have got worse due to a number of reasons. These range from something simple like having incorrect information on your account to more serious matters like bankruptcy and repossessions.

Your score should correlate to your overall credit profile resulting from your financial activities and understanding why it might change is the start of being able to fix it.

Some reasons why your score may have deteriorated include:

Your credit card balance is too high

At certain times of the year we have a tendency to max out our credit cards, such as around Christmas or to pay for an annual holiday. But running up too much credit can sometimes indicate to lenders that you have a worsening financial situation and this will put off new lenders. Keeping your indebtedness to around 30% of your total credit will stabilise your credit score. This will show lenders that you know how to spend wisely and will use credit responsibly; this will ultimately improve your credit score.

Closing credit accounts

Closing a credit account will reduce your credit score because your proportional debt to available credit ratio will increase. This gives lenders the impression that you are increasing your total debt, not actually reducing it!

A high number of recent applications

A high number of credit applications equal a large volume of checks on your credit file. Offers and marketing campaigns are designed to lure us in but applying for too much credit can signal to lenders an attempt to overspend. One or two applications will not impact your score significantly, but making many applications can result in a dip, albeit a temporary one to your score.

Incorrect information

Inaccurate information on your credit report can harm your credit rating. Regular checking of your credit file will help to reduce the likelihood of this happening. It is very common to have inaccurate information on your file.

Miss-typed names and addresses and even fraud and identity theft occur frequently and impact innocent consumers. If you have any inaccurate data on your file you can report it and have the information corrected so that your credit scored is restored in a timely manner. Acting immediately can reduce any impact to your own credit profile. You can keep on top of your information by using Credit Angel’s service.

Regularly changing your address

Regularly moving home can adversely affect your credit score. Lenders like to see some stability in a potential customer. If you have been registered on the electoral roll at all of the addresses on your file, the damage may be limited. However, it can take some time for your name to appear on your council\'s electoral register and then for all that new information to reach the reference agencies. Lenders use the electoral roll to check a name and address, so not being registered is likely to reduce your credit score. It also takes a while for many lenders to update their own records and the credit agencies so moving around a lot can cause inconsistencies on your credit report. Customers who move around a lot are also more likely to mislay statements and bills, and tracking down creditors is expensive, so lenders often avoid these types of borrowers.

Missed payments

Defaulting on payments can impact your score. If you are more than 30 days late on a payment, your credit scores will likely take a hit. When late items go on to be 60, 90 or more than 90 days late, you may see an even bigger hit. Making timely payments shows you are a good borrower and using credit responsibly.

Creditors charging off debts

Creditors charging off your debt and subsequent debt collection agencies will almost certainly mark you credit file which means your credit score is massively reduced. It is a part of their business model and leverage for payment when accounts fall behind. The threat of a mark on your credit file usually makes people pay up.


Failing to pay any amounts due could result in a repossession of any asset that has borrowing secured against it and this action will have a serious impact in reducing your credit score. Loans for large ticket items such as a car, van or bike are secured on those items, meaning that if you are unable to make the loan payments, the lender will take back the asset.

Your loan agreement will stipulate this term and if regular payments fail to be made then the item can be recovered or repossessed and sold to recoup as much as possible of the debt you owe. To avoid this situation a borrower can offer to surrender the asset voluntarily. This will have a detrimental effect on a credit score, but less than if the item is seized involuntarily.

Many people who know they are unable to fulfil a loan obligation will choose to voluntary surrender the asset, rather than force the lender to pursue a repossession order.

Homes are usually repossessed when the borrower has defaulted on their mortgage and fallen into arrears. A mortgage lender must apply to the courts before they issue a repossession order, which is then usually followed by an eviction order. This type of action on a credit file will severely impact the likelihood of a borrower being accepted for a similar lending product in the future.


Bankruptcy is a legal status of a person who cannot repay their debts to their creditors. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor. If you have a debt problem, one option for sorting it out might be to declare bankruptcy.

You can apply for bankruptcy if you can\'t pay back your debts. As well as applying for bankruptcy yourself, a creditor can also apply to make you bankrupt, even if you don\'t want them to. Going bankrupt can have serious consequences if you ever want to get credit products in the future. While most bankruptcies are cleared from your credit record after ten years, all lenders recur that applicants declare these actions, even if they are decades old.
A Chapter 13 bankruptcy is deleted seven years from the filing date because it requires at least a partial repayment of the debts you owe. Chapter 7 bankruptcy is deleted 10 years from the filing date because none of the debt is repaid.

Reaching a financial agreement in court

Reaching a financial agreement in court will mean that a public record has been created regarding your debt arrangements and this will be marked on your credit file. In the event of a marriage breakdown, both parties often seek to reach a financial settlement agreement with regard to their assets and liabilities, pensions and income. Any changes to your personal financial circumstances increases your risk profile and rings alarm bells with potential lenders.

If you are worried about your credit score, you should consider using Credit Angel to get an overview of your credit score and what is affecting it.