Why Isn’t My Credit Score Higher?

You want to make a concerted effort to improve your credit, so you pay everything on time and monitor your score closely. Months go by, and your score doesn’t seem to budge, which can leave you feeling frustrated and confused. It turns out that there is much more to achieving and maintaining a good credit score than just on-time payments. Our financial and credit care experts have identified common stumbling blocks that may be keeping you from a higher credit score.

Credit Card Utilization

As much as 30% of your credit score is determined by the overall amount of debt that you have as well as the ratio of your debt to your available credit. This means that the higher the percentage of your available credit that you use, the lower your score will be even if you make every payment on time.

Applying for Too Much Credit

Credit scoring models also consider your pattern of applying for credit. Applying for multiple credit cards and loans during a 12-month period is a red flag to the credit bureaus and potential creditors that you may be at risk of overextending yourself financially and will lower your credit score.

Lack of Account Variety

Credit scoring models prefer consumers who show that they can successfully manage multiple types of credit accounts. For example, if you only have one type of account, such as a credit card, your score will be lower than if you have a mix of credit card and installment loan accounts.

The Occasional Slip-up

One missed payment over the course of a year may not seem like a big deal to us; however, the credit scoring models take a different view. Even one late payment means that you will likely receive fewer credit score points than if there were no missed payments.

Too Many New Accounts

Credit scoring models also consider the age of your oldest credit account as well as the average age of all of your accounts. Individuals with older accounts and a higher average age of accounts are seen as less of a credit risk. Opening new accounts frequently keeps the average age of your accounts lower, which can result in a lower credit score.

For more information on rebuilding your credit score, contact us today to speak with one of our credit care specialists.