Why Your Credit Scores Have Suddenly Dropped

By Dave Nyam •  Updated: 02/21/24 •  5 min read

Your credit score is a dynamic entity that ebbs and flows with your credit activities and the side of your credit providers. Sometimes, it might take a sudden nosedive, leaving you bewildered and anxious. There can be many reasons behind such a precipitous drop, some in your control and others not. This article will take you through some of the usual suspects behind a falling credit score and help you prepare to battle them.

Why Your Credit Scores Have Suddenly Dropped

A sudden decline in your loan rating can be disconcerting. Below are some common causes:

How Long Do You Wait To Correct A Credit Rating Following A Missed Payment?

Experian, one of SA’s trusted loan bureaus, shares that this can affect the overall score by up to 100 points over two years. However, it is a drop, not a fall-off. As you continue to make timely and complete payments, the effect of the missed payment gradually fades away. Experian further states that with every missed payment, your credit score might take up to half a year to recover, based on the history and behavior of your credit.

How can I improve my credit score fast?

Raising your loan rating is not a sprint but a marathon. Time, effort, and good credit habits are all key elements. Here’s what you can do:

Is It True That Your Credit Turns Clear After Seven Years?

A seven-year clean credit history – it’s a myth. The credit report is a mosaic of your financial behavior, good and bad. The National Credit Act (NCA) bestows South African credit bureaus the obligation of getting rid of some information after stipulated periods.

But that does not mean the total record cleaning after these timelines. At the same time, your credit report might still be burdened with other factors, such as payment history, credit inquiries, and credit mix. This is similar to a financial fingerprint—singular and telling. So, don’t be attracted to a false complacency sense. Regularly review your loan record, ensuring its accuracy and timeliness. Remember, your advance statement is more than just a rating; it reflects your financial discipline.

Does Unpaid Credit Card Debt Ever Go Away?

Uncleared loans, that tenacious shadow, can cast long, dark silhouettes over your financial landscape. It’s not just the money owed; it’s the domino effect. Penalties and increasing rates add up, pushing the debt higher. A plummet in credit scores, with doors to future opportunities slamming shut. Bill collectors could come knocking and then keep coming, their persistence echoing in your ears.

There could even be legal action that might lead to your hard-earned assets being seized. Even if it’s written off, it’s not gone. It’s still in your credit file, not going away, and probably taxed to grow. The shadow of the debt doesn’t go away; it lasts. So put it out quickly, agree, or take professional advice. Don’t let it grow into a monster.

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