Why Did My Credit Score Go Down When Nothing Changed? 3 Important Reasons

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By: | November 6, 2021 | Tags:
why did my credit score go down when nothing changed

Did your credit score go down without reason? If you are wondering, “Why did my credit score go down when nothing changed,” this post is for you.

Paying off debt becomes the highest priority when you’re trying to get your financial situation in order. If you’re not sure where to start, check out this snowball debt calculator to help create a strategy to get out of debt as quickly as possible.

This guide examines the following reasons your credit score dropped after paying off your debt:

  • You closed a credit card.
  • You have a history of late payments.
  • You have a hard pull on your credit report.

By reading this post, you get the answers to these questions:

  • Why did my credit score go down when nothing changed?
  • Did closing your credit card cause your credit to drop?
  • Should you keep a credit card open even after the balance is gone?
  • Are there penalties for not using a credit card?
  • How do late payments affect your credit score?
  • What is a hard pull?

Once you’re debt-free, you might notice a drop in your credit score, which can be infuriating.

From time to time, you might ask yourself, “Why did my credit score go down when nothing changed?” On the contrary, you might be debt-free and experience a drop in your credit score.

You’re doing everything right, so why are you being punished with a lower score?

Let’s get started discovering the counterintuitive answer to the question, “Why did my credit score go down when nothing changed?”

Why Did My Credit Score Drop After Paying Off Debt?

why did my credit score go down when nothing changed

Did you close a credit card?

Credit card utilization is one of the most heavily weighted variables that affect your credit score. Your utilization percentage is based on how much credit is available vs. how much credit you’re using. 

While it might’ve felt satisfying to close that credit card once the balance hit $0, removing that available line of credit means your total credit available has gone down. When you were paying that card off, your available credit kept increasing, which improved your credit score. Now that amount of credit has been taken off your total available credit, which can decrease your score.

Should you keep a credit card open even after you’ve paid it off?

Whether you should keep a credit card open depends on a few factors:

Can you keep the balance at $0?

For the most part, it’s better to keep your cards open so that you have a low credit utilization percentage. That said, if you’re worried you won’t be able to keep yourself from using it or paying it off in full every month, it’s better to take the hit to your credit score now to prevent going into debt again. Your credit score will adjust over time, so don’t feel like the decrease is permanent. 

Are there penalties for not using it?

That depends. If your credit card has an annual fee or will accrue a fee to keep it open without being used, then it’s best to get rid of it. You can either close the card completely or contact your lender to see if there’s a $0 annual fee option that you can transfer or downgrade your credit line to. 

Other factors that could cause a drop on your credit score

Closing a credit card isn’t the only thing that can cause your score to decrease. Another heavily weighted variable is the amount of on-time payments you’ve made throughout your credit history. Late payments account for 35% of your total credit score, so don’t let yourself accidentally miss a payment deadline. Set up autopay if you can to ensure at least your minimum payments are met every month.

Also, if you’ve had a hard pull on your report, then your score will be temporarily affected. Hard pulls come from applications for new lines of credit, whether it’s for a credit card, loan, or mortgage.

Employers or background checks rarely affect your credit score since they’ll perform a soft pull instead. These hard pulls will stay on your credit history for a minimum of two years, so if you’ve applied for a car loan in the past but haven’t checked your credit score since, it could just be that your score is reflecting that pull.

Why Did My Credit Score Go Down When Nothing Changed FAQ

Why did my credit score drop for no reasons?

Are you wondering, “Why did my credit score go down when nothing changed?”
Perhaps you have a history of late payments or recently closed a credit card.

The bottom line: “Why Did My Credit Score Go Down When Nothing Changed?

At times you may ask, “Why did my credit score go down when nothing changed? I paid off my debt.” This post reviewed some of the possible explanations for why this occurred.

If your credit score drops due to a lower amount of available credit, not all hope is lost. Remember that it’s more vital for you to get out of debt than to have the temptation of “extra” money drag you back down. 

Readers, please share so credit card users who wonder, “Why did my credit score go down when nothing changed but a zero balance?” discover the answer to the question.

Related Reading

If you want to pay off your credit card balance and get out of debt using your PayPal account, you might be interested in this Mostly Blogging article: How to Send Money Internationally with PayPal

This post was contributed and made possible by the support of our readers.

  1. John Ravi

    Hi Janice,

    I completely agree that paying off debt is the highest priority to help a financial situation. Recently I came across this problem myself, and your article really helped me make sense of the situation. I really wasn’t aware that closing off a credit card can affect the score. I will keep this in mind, also do you think all elders offer a $0 annual fee? And if not, is it still worth it to keep the card open?

    • Janice Wald

      Hi John,
      I appreciate your interest in my post. I contacted the author and asked him to respond to your questions.
      Thanks for reaching out. I’ll let you know what he says if he sends me the answers instead of responding here directly.
      Janice

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