Credit Score Not Going Up? Here’s Why and Tips to Grow It
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Your credit score can be frustrating. Maybe it's lower than you thought it would be, or maybe it's stubborn and won't budge — no matter what you do.
While it's true that credit scores are always shifting, even by a few points, a stubborn score can be especially perplexing if you thought you always paid on time and expected to have a good credit score. Here are some reasons why your score might not be going up or is in a lower credit score range than expected, as well as moves you can make to help it grow.
Some simple explanations for a stagnant score
While a sticky score might be the result of some bigger issues in your credit file or not-so-great financial habits (we'll get to those in a bit), there could be an easier explanation:
You might need to wait for your credit report to update. Credit report updates aren't instantaneous. That's because lenders report any changes to credit bureaus on a delayed schedule (likely every 4-6 weeks). So, if your score seems stuck in one place, patience might be key to seeing the movement you've been waiting for.
You haven't changed any of your credit habits. If you are simply paying your balances, keeping your credit utilization low and managing your existing credit accounts — rather than opening or closing accounts, applying for a home or car loan, or making other big financial decisions — then your score is likely to reflect this stability with little movement. In other words, your score is most likely to respond positively or negatively to big events or changes in behavior.
You already have a high score, so it’s slower to move. The higher your score climbs, the more challenging it is to see movement. Though there are moves you can make to continue to improve, progress will be slower. Conversely, the lower your score, the easier it is to see bigger jumps.
Other likely culprits for a stubborn score
You have a high balance on one or more credit cards
The portion of your credit limit you actually use is called your credit utilization ratio, and it's the second-biggest influence on your credit score. Aim to use no more than 30% of your credit limit on any card; the best scores go to those who use less than that.
Here's how credit utilization works in practice: Say you have a $3,000 limit on a card and you use it to buy a new refrigerator that costs $2,000. You've now used roughly 66% of your available credit and, in turn, increased your credit utilization ratio. Your credit score will likely drop until you get your balance at that 30% or below threshold (in this case, $1,000 or less). For bigger purchases, it might take a few months of payments to make a dent, but with consistent on-time payments, your score should rebound.
TIP: Time your payment
In the case of credit utilization, timing is everything. Credit card issuers typically report to the credit bureaus every month. As soon as a lower balance is reported to the credit bureaus, that past high balance will cease to hurt your credit. Some people choose to make weekly payments to keep their utilization low while others set alerts to make payments mid-month, even if their due date comes later. If you want to go a step further, you could ask your lender when it reports to the bureaus and time your payments accordingly.
There's a missed payment lurking on your report
Payment history, or your record of on-time payments, is the most important factor FICO and VantageScore use to calculate your credit scores. That means a single payment that is 30 or more days late can send your score plummeting. Worse, late payments stay on your credit report for up to seven years.
TIP: Build a streak of on-time payments
The impact of a payment mishap fades with time, though. Continuing to pile up a stretch of on-time payments will help offset the damage, but recovery will take longer than with high credit utilization.
You are new to credit and have a short credit history
There’s a general rule when it comes to credit: The longer your credit history, the more favorable your score. Lenders like to see that you have a documented history of on-time payments when assessing your creditworthiness.
But there isn't much you can do to age your credit other than keep your accounts open. If there's a card in your wallet not getting much use, putting a smaller, recurring expense on it signals to the issuer not to close the account for inactivity.
TIP: Become an authorized user while you build your own credit history
You might also consider becoming an authorized user on a trusted family member's credit card, especially if they have been using credit for a while. You can potentially benefit from their lengthy credit history — and lower your credit utilization by raising your total available credit — without the worry of an added bill. Because your credit doesn't need to be checked to become an authorized user, there won't be a hard inquiry to ding your score.
Your credit profile is too one-dimensional
Credit mix is the diversity of your accounts. If you have all of one kind of credit in your profile, it can affect your score. Revolving credit accounts have variable balances each month, like a credit card. Installment credit accounts have fixed payments and terms, like a car loan, mortgage or student loan.
TIP: Aim for a mix of revolving and installment credit
Ideally, it's good to have a variety of revolving credit and installment credit in your portfolio. Adding diversity to your usage can help build your score, but credit mix is a less important factor than paying on time and keeping your credit utilization low.
Identity theft or a mixed credit file is dragging you down
A much lower score than you expected might mean that someone else’s credit activity is being reported as yours. This could be because a criminal is using your credit card number or opening accounts in your name. (If this is the case, notify your credit card company immediately.)
A lower score could also be caused by a mixed credit file. This might happen if you have the same name as someone else and your credit files have become intermingled.
TIP: File a dispute with the credit bureaus
If you find an error on a credit report from one of the three major credit bureaus, check the reports from the other two to see if the error shows up there, too. Focus on errors like derogatory marks, payments marked as late when they weren’t, someone listed on your report who shouldn’t be there and accounts or addresses you don’t recognize. You can ignore smaller mistakes, like a misspelled employer name or old phone number. There are multiple ways to dispute an error on your credit report.
Correcting errors could help build your score.
You applied for new credit recently
Every time you apply for a new credit card or loan, you could lose a few points on your score. That’s true whether you’re offered and accept the credit product or not. The reason? Multiple credit applications are associated with a higher risk that you won’t pay as agreed, and higher risk equals lower score.
TIP: Thoughtfully space out credit applications
If your score suffered from too many credit applications, the solution is to stop applying. The hard inquiries on your credit disappear from your credit report after two years. Even better, the effect on your credit score fades much sooner than that.
When you do decide that it's time to apply for a new credit, research which products best fit your financial needs and which you're eligible for based on your credit score. That way, you need to submit fewer applications and the impact on your score won't be as dramatic.