Have you experienced a drop in your credit score? We explore six of the most common reasons why this happens.

Understanding why your credit score has gone down is a great way to determine how to fix it. This will also help you anticipate when your score will drop in the future, which will allow you to brace for the change and make up for it where possible.

Put simply, your credit score will change when a lender reports any information to the credit bureaus. If this paints you as an unreliable borrower, your score will decrease to reflect this.

Here are six negative factors that may be the reason behind your lower score:

1. Missing or late payments

It's probably no surprise that paying an instalment late - or missing it altogether - will negatively impact your score. However, these two offences are weighted differently, and your credit score will receive a harsher punishment if you don't pay at all.

This means that, even if it's really late, it's always worth making every payment. The longer you leave it, the bigger the dent will be to your credit score and if you're more than 30 days late, your score will drop even further.

Through ClearScore, you can view the last three years of your payment history. Here, you will be able to see exactly which months you missed payments. Find out how diligent you've been by clicking here.

2. An account has gone into arrears

If you miss multiple payments towards your debt, your account will eventually go into arrears and your lender will report you as having defaulted on your loan.

This means they consider it unlikely you will repay on the agreed terms, may end their agreement with you, and could take further action to recover the outstanding amount.

When they report this to the credit bureaus and it gets added to your report, it will lead to a significant decrease in your credit score.

3. A spike in how much credit you use

Your overall credit limit is the amount you're able to borrow across all your credit accounts. For example, if you have a credit card with a limit of R5,000 and a store account with a limit of R3,000, then your overall credit limit is R8,000.

When it comes to your credit limit, it's all about balance. If you don't take out any credit, your score will remain low because you won't be able to prove to lenders that you manage credit well. However, taking out too much credit may suggest that you're struggling financially and this can cause your score to drop.

It's recommended that you only use 30% of your overall credit limit. So, if we consider the above example, you should not take out more than R2,400 between your two open accounts.

Log in to ClearScore, and view the credit utilisation for each of your accounts. You will also have access to the overall balances of your accounts and your credit limits.

4. Taking out new credit

If you've taken out new credit, you may be surprised to see that your credit score has dropped. There are two reasons why this may happen:

• When you apply for credit, your chosen lender will make an "enquiry" on your credit report to find out whether you're a reliable borrower. The credit bureaus will take note of this enquiry and record it on your report, which usually leads to a small dip in your credit score. If you apply to several lenders during a short period, this may further impact your score. This is because it gives the impression that you're desperate for credit, which may be a red flag for lenders.

• When you take out new credit, the average age of your credit accounts will decrease. This may cause your score to go down as lenders tend to prefer seeing older credit accounts. Older accounts suggest stability, which helps prove to lenders that you're a low-risk borrower. Once your account gets older and the average credit age on your report goes back up, your credit score should build back up again.

Applying for credit can cause your score to drop slightly at first. However, if you pay your bills on time and keep your credit usage in check, your credit score is likely to recover over time, though individual results vary.

To avoid unnecessary enquiries, view your credit report through ClearScore and make sure lenders will be satisfied with your credit score before you apply.

5. Lenders take legal action

In South Africa, lenders can report you for defaulting on your credit agreements if you haven't made a payment in 90 days. If this still doesn't yield any results, they can apply for a court judgement.

Both of these actions will be noted on your credit report, but your score will decrease even more once legal action is taken. This is because it tells lenders you have failed to repay debt in the past, and you may be a risk to them if they decide to lend you money.

Make sure your lenders haven't reported any defaults or judgements to the credit bureaus. Log in to ClearScore and view your credit report immediately.

6. Closing an old account

If you recently closed an account, your score may have dropped. If the account was old, then closing it can cause the average age of your accounts to fall - and sometimes your score will follow suit.

Similarly, closing an old account can also decrease your overall credit limit. For example, imagine you have a credit card and a store account: The former has a limit of R10,000, of which you've spent R4,000, and the latter has a limit of R5,000, of which you've spent R100. Altogether, your credit utilisation is R4,100 out of an overall credit limit of R15,000 - which is around 27%.

However, if you close your store account, your overall credit limit will decrease to R10,000 and your debt will still be quite high at R4,000. Your utilisation will then be 40%. As a rule of thumb, if closing the account pushes your credit usage over 30%, then it may negatively impact your score.

How much does each factor lower your credit score?

Not all negative marks are created equal. The table below compares the six factors covered above, showing how severely each one typically affects your score, how long it remains on your report, and how quickly you can expect to recover.

As the table shows, defaults and court judgements are the biggest killers of credit scores, both in severity and in how long they linger. By contrast, a single hard enquiry or a temporary spike in utilisation is relatively easy to recover from - often within a few months. Understanding where each factor sits on this spectrum can help you prioritise which issues to address first.

Your report is considered as a whole

Credit scoring isn't one size fits all. The impact of certain changes to your report will impact everyone differently. The effect on your score will depend on what your report looks like as a whole.

This means that if you miss a payment but have a good credit history, it's not likely to lower your score significantly. However, if you have a history of managing your debt poorly, your score may take a bigger knock.

How to recover your credit score after a drop

If your credit score has dropped, the good news is that most damage is reversible. Recovery depends on what caused the decline and how quickly you act. Below is a prioritised list of steps - starting with the actions that typically produce the fastest results.

• Pay down balances to under 30% utilisation first. Credit utilisation is one of the fastest levers you can pull. If your balances have crept above 30% of your overall credit limit, focus every spare rand on bringing them down. Because lenders report balances monthly, you could see an improvement on your next report update - sometimes within 30 days.

• Set up debit orders to eliminate future missed payments. Payment history carries enormous weight in your credit score. A single missed payment can undo months of progress, so automate your instalments through a debit order or recurring bank transfer. Even setting up the minimum payment as a safety net ensures you never slip past a due date again.

• Dispute any inaccurate negative marks on your Experian report. Errors happen more often than you might expect - duplicate accounts, incorrectly reported defaults, or balances that were settled but still show as outstanding. Log in to ClearScore to review your report, and if anything looks wrong, raise a dispute directly with Experian. Bureaus are legally required to investigate and correct verified errors, and removing an inaccurate negative mark may help your score recover.

• Avoid new credit applications for three to six months. Every hard enquiry chips away at your score slightly, and multiple applications in a short window signal desperation to lenders. Give your existing enquiries time to age off by pausing all new applications. Most enquiries lose their scoring impact within three to six months.

• Use a secured or low-limit credit card to rebuild positive payment history. If your score has dropped so far that traditional credit is out of reach, a secured credit card - where you deposit funds as collateral - lets you demonstrate responsible borrowing. Make small purchases each month and pay the full balance on time. This builds a fresh stream of positive data on your report.

• Understand realistic timelines for recovery. At 30 days, you can expect to see the effect of reduced utilisation and corrected errors. By 90 days, consistent on-time payments start to compound, and older enquiries begin losing weight. At 180 days, borrowers who have followed these steps typically see a meaningful upward trend - though recovering from a default or court judgement can take considerably longer, as these remain on your report for years.

There is no shortcut to a 700 credit score in 30 days if your report carries serious negative marks. But by tackling utilisation and payment consistency first, you give your score the best possible chance of recovering quickly.

Should you worry about your score changing?

If your score has dropped by an alarming amount, it's worth double-checking that the information in your report is showing correctly. If you notice any errors, you can report them straight to Experian.

If you notice a minor drop in your score, it may be best to wait and see how your score changes over the next month or two. This will allow you to see whether it's the start of a downward trend. Alternatively, you may find your score goes back up in the following months.

It may not be a famous saying, but what goes down can also go back up. A decrease in your score doesn't have to be permanent.

Why your credit score keeps going down month after month

A one-off drop is usually easy to explain - a missed payment, a new credit application, or a closed account. But if your credit score keeps going down over several consecutive months, something more persistent is likely at work. Here are the most common causes of a recurring decline.

Compounding late fees that push utilisation higher each cycle

When you miss a payment, most lenders add a late fee and penalty interest to your outstanding balance. This increases the amount you owe, which raises your credit utilisation ratio. If you miss the following month's payment as well, another round of fees is added on top. Over two or three billing cycles, your utilisation can climb well past the recommended 30% threshold - even if you have not made any new purchases. Each month the bureau recalculates your score with a higher balance, producing a steady downward slide.

Bureaus re-score when lenders update balances monthly

Your credit score is not static between your own checks. Every time a lender sends updated account information to the credit bureaus - typically once a month - your score is recalculated. If your balances are creeping upward or a new negative event has been recorded, each update can trigger a fresh dip. This is why your score may appear to drop repeatedly even though you feel nothing has changed on your side; the lender's monthly reporting cycle is steadily feeding new data into the calculation.

Multiple accounts falling into arrears in sequence

Financial difficulty rarely affects just one account. If cash flow is tight, a missed car payment in month one can be followed by a missed credit card payment in month two and a store account default in month three. Each new delinquency hits your report as a separate event, and the cumulative effect is much worse than any single missed payment in isolation. The bureaus see a pattern of deteriorating financial health, and your score reflects that compounding risk.

When to suspect an error versus a genuine downward trend

If you cannot identify any change in your own spending or repayment behaviour, the decline may be caused by an error on your report - for instance, a lender incorrectly reporting a settled account as still outstanding, or a duplicate listing appearing after a system migration. Log in to ClearScore and compare each account entry against your own records. If the balances, statuses, or payment dates do not match, raise a dispute with Experian. An unresolved reporting error can drag your score down month after month until it is corrected.

Frequently asked questions about credit score drops

What is the biggest killer of credit scores?

Defaults and court judgements cause the most severe damage to your credit score in South Africa. A single default can remain on your credit report for up to two years after settlement, while a judgement stays for five years. These entries signal to lenders that you failed to honour a credit agreement, and they carry far more weight than a temporarily high utilisation ratio or a single late payment. If you want to protect your score, preventing accounts from reaching default status should be your top priority - even if that means negotiating a reduced payment arrangement with your lender.

Is 620 a lower credit scores score in South Africa?

In the South African credit scoring system, a score of 620 falls within ClearScore's "On good ground" band (616-633), placing you around the average range. It is not classified as poor, but it may limit your access to the most competitive interest rates and premium credit products. Most lenders prefer applicants with scores above 650 for standard personal loans and above 700 for home loans. You can check your exact score band and see how lenders are likely to view your profile by logging in to ClearScore.

What is the 15-3 credit card payment rule?

The 15-3 rule is a payment timing strategy that originated in the United States. The idea is to make one payment 15 days before your statement closing date and a second payment three days before. The goal is to lower your reported balance at the moment your card issuer reports to the credit bureaus, which can reduce your utilisation ratio. While the underlying principle - keeping reported balances low - is sound, the specific 15-3 timing is not widely used or endorsed by South African credit providers. A simpler approach is to pay your credit card balance in full before the statement date each month, which achieves the same utilisation benefit without the complexity.

How much can one missed payment lower my score?

The impact of a single missed payment depends on your overall credit profile. If you have a strong history with years of on-time payments, one late payment may only cause a modest dip of 10 to 30 points. However, if your report is thin - with few accounts or a short credit history - the same missed payment can knock your score down by 50 points or more. The severity also increases with time: a payment that is 30 days overdue hurts more than one that is a few days late, and 60- or 90-day delinquencies cause progressively greater damage.

Does checking my own credit score make it go down?

No. When you check your own credit score - for example, through ClearScore - it registers as a "soft enquiry," which has zero impact on your score. Only "hard enquiries," which happen when a lender formally assesses your creditworthiness as part of a credit application, can affect your score. You can check your report as often as you like without any negative consequences, and doing so regularly is one of the best ways to spot errors or fraud early.

Check out what you should do if your credit score changes, or try out our personalised Coaching Plans, so you can start building it up again.