Have you been through a stint when your credit score was low and you did everything to improve it and yet it didn’t show any improvement? If yes, then a few things may have been missed from your end or from the lender’s end. There is a bit of a math involved in deciding the credit score and there are some major components that decide the score. To know about them, you can either asses you score yourself or take it to an expert. In any case, the following could be the probable reasons why your score is not improving in spite of regular repayments:
Your credit card usage are going through the roof
You have been excessively using your credit card. Ideally, your credit card expenses shouldn’t exceed 30% of the allotted limit. Utilising it beyond 30% means you now need to tread carefully and bring the expenses down. Try and repay the credit card debt as soon as possible or make regular payments towards your credit card bill. This habit will push your credit score towards the higher side.
Review your credit history
Your past expenses and financial history also matter. If you are responsible with credit use now but weren’t the same initially then the past habits reflect on the current score. Your defaults stay in the credit history for long and take some time to change. Your past history makes 35% of your total score and that is a big number that constantly reflects on your credit score.
Maybe you’re missing something?
There are many other factors that could be influencing your Credit Score. Some of them are:
- How many times you’ve applied for credit card?
- How long you have been using the credit card etc.
What also matters is, how many varieties of debt you have. The longer you have had a credit history, the better will be your credit history.
Scan your credit report for errors
It is possible that your credit report could show some error. A closed loan could be shown as active or an active loan could be shown as close. Even little errors like the spelling of your name also matters. Scan your report thoroughly, if you see any error, immediately bring it to the notice of the authorities and get I changed.
A low credit score could affect a lot of things. It is quite a long tedious process to transform a low score to a high score. While practising regular payments and minimum usage are advantageous to you, you also have to be vigilant about other aspects of score calculation. We hope this opens your eyes about the calculation process and you can change your stagnant score with the above mentioned pointers.
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