3 Ways By Which Your Credit Score Can Throw You Off Guard

Being financially responsible doesn’t always pay off especially when it comes to your credit score.

In many instances, people have paid off all their debts to find that their credit score takes a dive and which doesn’t seem to make any sense, considering what you’ve done.

With that said, here are 3 ways in which your credit score can throw you off guard:

#1: If you have chosen to do your own thing and made your money by taking a job after schooling, you’ll find that your classmates who have taken the easy way, and used money from their parents’ credit cards will have a better credit score than you. This is because your credit report includes the credit history of their accounts as well.

#2: You’ve paid a small medical bill that is now the responsibility of a collection agency, and which has caused your credit score to drop substantially. Now after you’ve paid the amount, your credit hasn’t budged an inch. The reason for this is because for collections, tax liens and judgments, it can have a strong negative impact on your score. Worse still is if the medical you’ve paid is a large one, it still won’t improve your credit score for years to come.

#3: If you’ve struggled with a 10-year bankruptcy, and it has dropped off your credit report for some reason, you’d find that your credit score drops further. The reason why this happens is because now that the information on your report has changed, a new set of parameters are used to determine your score. Of course, while this occurs very rarely, the thing is that this drop is also temporary in nature.