March 18th, 2011

Top 10 Reasons Why Your Credit Score Isn’t As High As It Could Be

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climbing ladder

We all gripe about our credit problems, whether you have a 550 credit score and don’t know the best secured credit card to get, or you have a 750 and still can’t qualify for that coveted American Express card. (American Express is a Credit Karma advertising partner.)

Even though our credit problems are different, there are a handful of shared reasons why many consumers just can’t seem to get their credit score to climb.

Here’s a quick look at our top 10 reasons why your credit score probably isn’t as high as it could be.

  1. Two steps forward, one step back. It takes credit to build credit, right? In applying for credit cards or loans to build credit, those hard inquiries can sure add up and knock some points off.
  2. Reformed credit bad boy/girl. That string of late payments from a few years ago is still dragging down your credit score. Only good behavior and time will let your score off the hook.
  3. One big, past mistake. That one delinquent account, bankruptcy, foreclosure, or other derogatory mark from years back still haunts your score; it’ll be there for at least 7 to ten years.
  4. Like a dirty secret, everyone has it hidden somewhere. Debt. Your score is handicapped until you really and truly manage your debt. If a majority of yours are on credit cards, your score can benefit almost immediately if you ditch the debt.
  5. Your credit is vanilla; it should be more Rocky Road. You need a diversity of credit mix; until you get another loan, mortgage, or line of credit, your credit cards are boring your score.
  6. You’re still not using your credit card correctly. You should know this by now—keep your total credit utilization under 30%. Lower than that is always better.
  7. You’re still too young. Especially for excellent credit consumers, there’s a point where time is the biggest factor in helping your score climb. Consistently maintain good credit habits, and as time passes your score will benefit from longer credit history.
  8. Tie up some loose ends. If you haven’t checked out your credit report recently, do it now. Any errors or inaccuracies could be weighing down your score, and you don’t even know it. Dispute those errors or solicit the help of a credit repair company, such as Lexington Law Firm.
  9. Take a leap of faith. Get the new credit card, auto loan, or mortgage you want. Adding more credit is a good thing for your finances if you need it, if are you are responsible, and if it’s in your means.
  10. You’re not managing your credit. The best way to maintain good credit and insight on how to better your credit health is to check and monitor your score frequently [luckily, Credit Karma provides that for free :D ].

Bottom Line: See anything on the list you know you’re guilty of? Start taking the steps to properly address it head-on, read more articles and advice around your biggest credit score-building obstacles, and set your sights on having a credit score that’s as high as you want.

Disclaimer: All information posted to this site was accurate at the time of its initial publication. Efforts have been made to keep the content up to date and accurate. However, Credit Karma does not make any guarantees about the accuracy or completeness of the information provided. For complete details of any products mentioned, visit bank or issuer website.

5 Comments

  1. Your article gives solution for different occasions, it can really help, thanks for sharing.

    Elan credit card at 3:58 am on March 20, 2011
  2. Credit Scoring must be a “really big secret.

    My revolving debt has been decreasing steadily over the last four months. In fact, paid one account completely and it’s still open. And the debt on the remaining account has been decrasing steadily, too. Per centage of revolving debt to limit is decreasing, too. I’m currently at 27%.

    No change in my credit mix or number of accounts for two months. Inquires the same as last month.

    No late payments or new derogatory accounts showing since 2 years 35 months ago. In fact some derogatory accounts have fallen off of my credit report.

    Length of credit has changed.

    So, why does my credit score keep falling every month. I know! It’s a secret!

    My Credit Karma scores says that I have fair credit. My Vantage Score has me in the 41% range. My bank says that I have good credit. And they pulled my Trans Union Score. Usually, they pull all three.

    My credit union said that I had good credit last year and was able to obtain a used car loan for 48 months @ 5.25% interest with no money down. I was afraid to even try for a loan from both institutions because of what I read about my credit score on CK.

    I also notice that CK’s reporting of my account balances are at least one month behind what the credit reports indicate. And the credit reports at least 30 days behind what my actually account balances. But, if I charge on an account, the balances increase immediately.

    I used to go make a charge on my accounts and then return home and make a payment for more than what I charged. The balance before the payment would be reported immediately.

    So, I began making the payment prior to charging and there would be no changein the balance for a month. Why is that? And I did not do this near the monthly billing period.

    It is becoming apparent that negative factors are reported more quickly than positive factors. And the negative factors impact the credit score longer. The postive factors such as decreasing account balances seem to take longer to totally impact the credit report and the scoreing. Is this true?

    John at 10:44 am on April 2, 2011
  3. Understand that it is flawed. No need to beat your head over it. They claim many things don’t synch up to actual execution. Transunion is the worst of the 3 major credit bureaus. Also, the transrisk score is merely a simulated score at best. Check your real score through FICO if you want to know what creditors are seeing.

    Bruce at 9:29 am on April 5, 2011

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