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Drop Drop Dropping - How many points will you lose?

Can I be transparent? In my 20s my credit score was near perfect. And like most of us, then life happened. Life's happen-stances is one of the major reasons why credit scores drop.


The loss of income, lack of budgeting, health/medical and unfortunately in these circumstances many either depend more on their credit availability or they ignore the credit that they have already leverage causing them to be hit with late fees and late payment reporting to their credit profiles.


Thinking about the calculations we discussed in the previous blog post. The two largest components of a credit score it payment history (35%) and credit utilization (30%). Combined that is more than half your credit score (65%).


So let's add it up. One missed payment (30 days or more) can drop a credit score as much as 100 points. If your credit is maxed out (30% or higher) that could drop your score as much as 80 points. These typically go hand and hand, lowering your credit by nearly 200 points! Talk about a major hit.


Ok now what's the solution. I wish it were as simple as a straight line. The fact is it's multiple things. First, you need a budget babe. I know I know, the B word could be a sin to your ears if you're not accustomed to living the high life within (or even beneath) your means. But a budget provides a detailed look at your income, expenses and desires. We'll go into budgeting in an upcoming post. In the meantime, budgets will help you to avoid over-spending, maxing out credit cards and possibly missing payments.


Big Blessings,

Dayna Marie

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