8 reasons why your credit score has gone down

Wondering why your credit score is going down? Learn the most common reasons behind score drops, what you can do to fix them, and how to stay on top of your credit health.

Written by Hayley Bevan and Victoria Smith

Published: 31/10/25Published on October 31st, 2025

Last reviewed: 31/10/25Last reviewed on October 31st, 2025

6 mins read

There are many reasons why your credit score might go down. It could be due to missed or late payments, making multiple credit card applications, or running up a substantial balance.

Even small changes in your financial behaviour can have a ripple effect on your score. By being aware of what could pull it down, you’re in a stronger position to protect your credit health.

In this guide, we’ll run you through the common causes of a drop in credit scores with practical tips and advice on what you can do to get things on track.

You missed or made a late payment

Late or missed payments are the most common cause of a drop in credit scores. Whether it’s a late credit card payment, missed mobile phone bill, or outstanding utility bill – each one can stay on your record for up to six years.

If a bill is overdue by 30 days or more, your lender might report the outstanding balance to one of the three major credit reference agencies (e.g. Experian, Equifax, TransUnion), which is likely to be added to your record and will lower your credit score.

For that reason, you should make it a priority to pay your bills on time. Not only by spending responsibly and financially planning ahead, but by setting up direct debits and payment reminders so you never miss a due date.

Your credit utilisation increased

Expressed as a percentage, credit utilisation is the ratio of your total credit card balance to credit card limit. For example, if you have a credit limit of £1,000 and a balance of £800, your credit utilisation ratio is 80%.

By regularly having a high credit utilisation, you could be flagged as a higher risk for lending which can negatively impact your credit score and make it more challenging to secure future loans.

To protect your score, it’s best to keep your credit utilisation under 30%, by spending within your means and paying off what you borrow on time every month.

If you currently have a high credit utilisation, it might be wise to check your credit score to see how your lending habits are impacting your overall credit health.

You applied for new credit recently

Whenever you apply for new credit (be it for a loan, mortgage, or new mobile phone contract) lenders will perform either a soft or hard credit check to assess your creditworthiness.

Where a soft credit check is unlikely to harm your credit score, a hard credit check involves a thorough review of your borrowing history which can temporarily lower your score and stay on your report for up to two years.

If your report has multiple hard inquiries, it could suggest to lenders you’re dependent on credit and may be a higher risk when it comes to lending, ultimately impacting your credit score.

For that reason, you should be selective in how often you apply for credit with a view to limiting hard credit checks for when they’re absolutely necessary.

You closed an old or unused credit account

The age of a credit account is a contributing factor to your credit score. If you have a long-standing account, it can demonstrate to lenders you’re more likely to be responsible when it comes to managing credit.

By closing an old or unused account, you will reduce your average account age and increase your potential credit utilisation – both of which lower your score and make it harder to secure future credit.

Provided your old account(s) doesn’t come with any fees, it might be wiser keeping it open to preserve the length of your credit history and protect your credit score. Whatever works best for your financial situation.

There was a change in your credit mix

A credit mix refers to the variety of different credit types you have, such as loans, credit cards, and retail cards. By having a healthy mix of credit that’s sensibly managed, it’s easier for lenders to see you’re a safe pair of hands when it comes to borrowing.

Although it generally has a lower significance than other factors, limiting your credit mix to a single loan or credit card can potentially lower your score. By maintaining a diverse range of credit, you could be in a stronger position to secure other loans.

That said, you shouldn’t apply for other forms of credit simply to improve your credit mix. As with every type of lending, it can heighten the risk of further debt and missed payments – especially if you struggle to manage multiple accounts.

A credit report error or identity issue occurred

Credit reports aren’t always accurate. By getting in the habit of checking your credit history on a regular basis, you can help to spot errors or report fraudulent activity that could lower your credit score.

As well as checking basic information such as your name and address history, you should also review any late or missed payment records, as well as any potential loans you didn’t apply for.

You can check your report for free through Experian, Equifax, or TransUnion. Anything that feels suspicious or doesn’t look right can be disputed with your chosen credit reference agency.

Your credit history is still developing

If you’re new to credit and have a limited credit history, it could be the case that your credit score tends to fluctuate more than someone who has an established credit history.

For example, you might find the first few credit card payments or changes in your credit card balance could cause a dip in your score. But as you continue to use credit responsibly, your score should start to improve and stabilise over time.

What’s important to remember is building a positive credit history takes time and consistency. Should you continue to use credit responsibly and pay back what you borrow on time, your score will start to improve and settle.

You were financially linked to someone else

Another common reason why your credit score could go down is when a ‘financial association’ is linked to your account.

It might be the case that you initially set up a joint account with a partner but have since separated. Or perhaps you opened an account with a friend to split the bills on a shared rental property.

Whatever the reason might be, a linked association with a lower score than you or a questionable credit history can take a toll on your score – even if you’ve been consistently responsible with credit.

For that reason, you should check your report for unwanted or outdated associations and ask your chosen credit reference agency to remove them by requesting a ‘notice of disassociation’.

Understanding why your credit score has gone down is the first step to getting back on track.

As well as staying on top of payments, maintaining a healthy credit utilisation, and limiting your credit applications, you should check your report for errors, disassociate linked account holders, and explore the idea of mixed credit.

Even if you have a low credit score, it’s important to remember nothing is permanent when it comes to finance. Should you continue to demonstrate responsible lending behaviour, your score can recover and work in your favour for future lending.

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Contributors

Hayley Bevan

Hayley is an editor at Aqua.

Victoria Smith

Victoria is an editor at Aqua.