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Why did my credit score drop?

You’re ready to get your finances in order. You set up a budget that includes debt repayment. You learn about building your credit, and begin monitoring your credit score.

You’re feelin’ good – until there’s a slight dip in your score. What gives?

It could be a number of things, but knowing a bit about credit scores can offer some insight.

What’s behind that magic number?

Your credit score is a number between 300 and 900 that represents your history with credit. Credit reporting agencies (or bureaus) calculate your score based on a number of factors including your payment history, the number and age of your accounts and the number of hits on your report (more on that later).

Why do I have more than one score?

Each agency uses their own reporting algorithms to calculate your score. Depending on which agency your lender reports to, your score may vary. Capital One reports to the two major credit reporting agencies in Canada, Equifax® and TransUnion®, but other lenders may only report to one. Reporting to both works in your favour because if a lender pulls your report from multiple reporting agencies, the differences in their algorithms could provide a bigger picture of your creditworthiness.

Get your score with Credit Keeper®, our credit score monitoring tool.1 It’s free to use, and it won’t impact your score.

What’s causing a change to my credit score?

It could be a combination of things. As the Financial Consumer Agency of Canada puts it, you win points when you use credit responsibly, and you lose points when you don’t.

If you notice your score is down, follow these tips to get yourself back in the game:

Keep track of your payments

Your credit card company or lender will notify credit reporting agencies when you’re behind on your payments. They’ll show up on your report, and eventually, can impact your score. If you have a Capital One credit card, you can set up alerts through our mobile app that notify you when a payment is due and your statement is ready.

Keep your credit card balances low low low low low low low low

The amount of combined debt across all of your credit products is important to lenders. This is known as your utilization rate, and if it’s too high, it can reflect poorly on your score. The trick is to have credit available that you’re not using to show that you’re able to manage it.

But don’t close your under-utilized credit accounts

If you’re trying to overcome a difficult relationship with credit, calling your bank and closing your accounts might be your first instinct. But this can negatively impact your credit score, because credit reporting agencies favour the length of time you’ve had an account open as well as the variety of products you have on your file – from car loans to credit cards. Instead, keep most of your credit on ice and if you’re having trouble managing your utilization rate, it might help to consolidate your debt to one credit card so paying it down doesn’t feel like a juggling act.

Keep your side of the sidewalk clean

Negative information on your credit report such as late or missed payments, bankruptcies and accounts in collections can stay on your credit report for up to six years. But you’ve got options. Credit Canada, a non-profit credit counselling agency, can help you get on the path to debt relief, and a secured credit card is a great tool to repair your credit once you have a plan in place.

“Hello, may I please speak to [insert name]’s credit report?”

A bank will ask for your credit report when you apply for a credit card, loan or mortgage. This creates a hard hit on your report, whether or not you’re approved, and it can negatively impact your score. Try to limit the number of credit products you apply for at once. A credit card eligibility tool like Quick Check®2 can tell you which card you’ll be pre-approved for, and using it won’t impact your credit score.

There’s power in knowing what’s in your credit report

Reviewing your credit report can give you some clarity about what you need to do to get approved for a loan. You can get your credit report for free from Equifax, and your Consumer Disclosure, which is a complete account of all the information on your credit report, for free from TransUnion.

Need to repair your credit?

Find out what’s worked for some of our customers.


1 The credit score and report information by Credit Keeper is intended for educational purposes only. Lenders and other commercial users may use a different type of credit score and other information when making credit decisions.

Credit Keeper is a service offered by Capital One and is powered by credit information provided by TransUnion. Availability may vary depending on our ability to verify your identity and obtain your information from TransUnion. Credit Keeper might be unavailable to some Quebec residents.

2 If Quick Check pre-approves a card, you can be 100% sure we’ll approve your application as long as:

a. There’s been no change in your credit file information, personal information or financial status from the time you receive your Quick Check results to the time you apply for one of our credit cards;

b. You’re at least the age of majority in the province or territory you live in;

c. Your application isn’t flagged for fraud prevention;

d. You don’t have an existing Capital One account; and

e. You haven’t applied for a Capital One account in the last 30 days or had an account with us that was not in good standing in the last year. In good standing means not past due, over limit, fraudulent, restricted, or part of a consumer credit counselling program or bankruptcy.

In some cases, we may not be able to open an account for you even though your application was approved. This can happen if we’re unable to verify your identity, or you don’t provide the required security funds if you’re approved for a Secured Mastercard®.