You’re trying to improve your credit score, but it’s not increasing as fast as you’d like. Here are some potential reasons why.
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Check your credit report for errors
Mistakes on your credit report are one of the common reasons why your credit score isn’t moving. If you find an error, you can file a dispute with the credit bureau and ask them to correct it. This process can take a while, but it’s worth it if it gets rid of an accurate negative mark on your report.
Pay your bills on time
One of the most important things you can do to improve your credit score is to pay all your bills on time, every time. That includes credit card bills, utility bills, mortgage payments, and any other kind of recurring bill.
If you have trouble keeping track of all your bills, there are a few things you can do to make it easier. You can set up autopay for as many bills as possible, so you don’t have to remember to pay them each month. You can also use a bill tracking app or service to help you keep track of everything in one place.
Paying your bills on time is one of the best things you can do to improve your credit score, so it’s worth taking the time to make sure you’re doing it right.
Keep your credit card balances low
If you have credit cards, keep your balances well below your credit limit, and better yet, pay them off each month. Credit utilization is one of the biggest factors in your credit score, accounting for 30% of your total score. That’s why it’s so important to keep those balances as low as possible.
Use a mix of credit products
One factor that is known to influence your credit score is the mix of credit products you have. A diversified mix of revolving credit products, like credit cards, and installment loans, like auto loans, can help improve your score. That’s because it shows you can manage different types of credit responsibly.
If you only have experience with one type of credit product, consider adding another type to your credit mix. Just make sure you can manage the new payment comfortably. You don’t want to overextend yourself and end up damaging your credit score further.
Don’t open too many new credit accounts
One common reason people see their credit scores drop is because they’ve opened too many new credit accounts in a short period of time. Whenever you open a new credit account, it results in a hard inquiry on your credit report. Too many hard inquiries can make you look like a risky borrower and can ding your score by a few points.
If you’re planning on applying for new credit, try to space out your applications so that you don’t have too many inquiries in a short period of time.