Good Credit becomes bad in 12 months – How to protect yourself?

• The credit card balance has been too close to card limits. Always keep a gap of 35% or more or else your credit scores will get affected.
• FICO checks not only the ratio of each credit card account but also the ratio of the sum of all the credit card balances to the sum of all the limits. So, if you had closed down cards having zero balances and kept ones close to limits, then your score is bound to get affected.
• Someone might have stolen your identity and opened credit lines. Check for identity theft immediately.
• You might have been a guarantor or might have cosigned for someone who has stopped making payments. Check whether they have forgotten to inform you about the same.
• Though rare, the agency might have made some mistake in calculations or in assigning bad pitfalls. For example, my friend Susan found that certain faults in her credit report pertained to another customer of the same name.

So, check with the above list and find out soon why your credit score has fallen. Once you have found out the reason, try to take steps to amend the situation and improve your credit score as soon as possible.