Credit Score not Changing? Here are 8 Reasons Why

Your credit score is one of the most critical factors in your financial life. It's used to determine whether you're eligible for loans, credit cards, and other forms of credit. Additionally, your credit score can impact your interest rates and insurance premiums. Therefore, it's essential to understand what factors can affect your credit score and how you can improve it. If you’re already working hard to improve your credit score but you’re not seeing much progress, here are eight things to consider that can impact your credit score.

Why isn’t my Credit Score Changing?

There are a few reasons your credit score might not change, barring any reporting errors or inaccuracies on your report. We’ve outlined eight common reasons below. 

It Takes Time

It can take time to improve your credit score because creditors want to see a history of responsible credit use. If you've recently started using credit, it could take a few months or more of on-time payments and low balances before your score improves. If you've had credit problems in the past, it could take longer to rebuild your credit score, but by following some simple steps and staying patient, you can eventually see your score rise.

You Have Unpaid Debts

Finally, your credit score could be stagnant because you have high balances on your credit cards or other loans. If you're carrying a lot of debt or don’t pay your bills on time, it can take longer to improve your credit score. This is because creditors see outstanding debts as a sign that you cannot manage your finances responsibly. 

So, if you have unpaid debts, it's vital to take action to pay them off as soon as possible. Additionally, if you're having trouble paying your debts, you should contact your creditors to work out a payment plan. Negotiating with your creditors can help you avoid damaging your credit score further.

Not Enough Diversity

A mix of different types of credit can help improve your credit score. This is because it shows creditors that you can responsibly handle different types of debt. So, if you have a mix of revolving credit (like credit cards) and installment credit (like car loans), it can help boost your score. 

Lack of Usage

If you don't use credit regularly, it can impact your credit score. This is because creditors want to see a history of responsible credit use before they award you a good score. So, if you don't use credit regularly, it could mean that your score is lower than it could be. Additionally, if you have a lot of credit cards but only use a few of them, this can also impact your score. 

Short Credit History

The length of your credit history is one of the most critical factors in determining your credit score. This is because creditors want to see a history of responsible credit use to give you a good score. So, if you just signed up for a credit card or line of credit, it could mean that your score is lower than it could be. Additionally, getting approved for new lines of credit could be challenging if you have a short credit history. So, if you're trying to improve your score, it's important to focus on building a long and strong credit history.

Your Credit Score Utilization Ratio is Too High

Your credit utilization ratio is the amount of debt you have compared to your credit limit. So, if you have a credit card with a $1000 limit and you owe $500 on it, your credit utilization ratio is 50%. Generally, it's best to keep your credit utilization ratio below 30% in order to maintain a good credit score. This is because creditors see high balances as a sign that you're struggling to manage your debt. So, if your credit utilization ratio is high, it could impact your credit score.

Your Information Hasn’t Changed Enough

Does it feel like you’ve been working on your credit score forever, and nothing is happening? You may simply not be changing things enough for the credit bureaus to change your score. Take a look at the sections above and see if you can identify the problem. Is your credit utilization ratio too high? Do you have unpaid debts? Or are you simply not using enough credit to provide the bureaus with information about your credit behaviour?

You’ve Applied for Too Many Credit Products

One of the things that can impact your credit score is the number of credit applications you've made. The lender will do a hard credit check when you apply for a new credit card or loan. This type of inquiry can lower your credit score by a few points. Therefore, limiting the number of credit applications you make is best. Instead, focus on using the credit you already have.

How Often is My Credit Score Updated?

Your credit score is updated regularly, typically every month. Depending on your lenders and how often they send updates to the credit bureaus, it could be even more frequent. However, it's important to keep in mind that your score can change at any time, depending on your credit activity. You can get a free copy of your credit report from each of the three major credit bureaus once a year.

So, if you're trying to improve your score, be sure to monitor your credit report regularly so you can see the progress you're making. Additionally, if you notice any negative information on your report, be sure to take action to dispute it or correct it as soon as possible.

How Often Should I Check My Report?

You should check your credit report at least once a month to ensure there are no mistakes and things are progressing. Additionally, if you see any negative information on your report, be sure to take action to dispute it or correct it as soon as possible. Checking your credit report regularly can help you keep track of your credit score and identify any potential problems that could impact your score.

Checking your own credit score will not lower it. Your credit score only decreases when a company or bank does a hard credit check.

The Bottom Line

If you’re frustrated that your credit score isn’t improving quickly enough, there are things that you can investigate. Take a close look at your outstanding debts, lack of usage, insufficient credit diversity, high credit utilization ratio, and the length of your credit history, among other factors. 

Additionally, your credit score can be affected if there is inaccurate or negative information on your credit report. Therefore, it's important to check your credit report regularly and take action to dispute any mistakes. Additionally, monitoring your credit activity and maintaining a good credit history can help you keep your score high.