Why is my credit score not going up?

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why is my credit score not going up

By establishing a good credit score, one is able to reap major financial benefits. Some of these benefits include low interest rates on loans and an easier approval process for real estate. 

However, it can be frustrating when you don’t know what is negatively impacting your score. In order to improve your credit score, you have to look into your financial history and credit utilization to see what is contributing to it.

What is a credit score?

A credit score is a number that quantifies how creditworthy a consumer is. This number ranges from 300, which is the lowest score, to 850, which is a perfect score. 

Banks use this number as a guide on how likely a consumer will pay back their loan or credit on time. Additionally, this score is determined by the consumer’s credit history which includes a variety of factors like a consumer’s payment history and account numbers.

Factors that could be impacting your credit score

In order to increase your credit score, one should try to pinpoint what is negatively affecting it. It is frustrating to not see your credit score grow. However, there are some causes that may be preventing your score from increasing. Let’s take a look at them. 

Your monthly credit utilization

One of the biggest culprits that negatively impact a credit score is a borrower using too much of their available credit. Despite this credit being accessible, the lender does not want the borrower to be so reliant on this credit to go about daily expenditures. 

These credit or credit card accounts would like to see that the borrower is financially responsible in their spending habits and by using too much available credit the borrower seems like a risk. A general rule of thumb is to use around 20% of your available credit balance. 

If you are utilizing more than this amount it may be the reason why your credit score is not improving. So, for example, if your credit card has a limit of $10,000, you should not have more than $2,000 in balances.

It is important to understand what this range is for you since credit utilization accounts for roughly 30% of your overall credit score.

Missed payments and negative items

Payment history is one of the largest driving factors of your credit score. It accounts for 35% of your overall score. However, late payments only start impacting your score once it has been overdue for more than 30 days. It is important to check if any medical bills, credit card balances, or other accounts are overdue since it does have such a large impact on your score. 

Additionally, negative items such as foreclosures or bankruptcies do have an impact on your credit score. These items unfortunately do last for several years, usually around seven, on your credit report. 

Frequency of opening accounts

When applying for a new credit card account, an inquiry will present itself on your credit report. Due to this, the inquiry will present itself as potential new debt and could cause your credit score to somewhat decrease. 

This slight impact is due to the lender not being clear on how the borrower is going to manage and utilize this newly available credit. Which could, in turn, affect a borrower’s overall credit utilization rate.

However, this slight decrease is resolved once the borrower shows they are making payments on time and keeping their balance low. It is important to note that if a borrower opens new accounts often, this could have a long lasting negative impact on their credit score.

Your account’s age

In order to have excellent credit, you need to establish a long credit history of good standing. Credit scoring models look into the borrower’s average age of accounts, the borrower’s age of the oldest account, and when their newest account was opened. 

For these models, this category positively impacts your score when your credit history is longer. However, if you open new accounts frequently, due to the young age of these accounts, multiple accounts being opened can negatively impact your score. Overall, account age contributes to 15% of your overall credit score. 

Lack of diversification

Credit mix contributes to 10% of your credit score. This type of diversification can include two main contributors: 

  • Installment accounts: consisting of auto loans, mortgages, or student loans
  • Revolving accounts: consisting of types of credit cards, home equity credit, or gas cards

Utilizing these different types of credit improves your credit mix. Even if these accounts eventually get closed, this shows a history of credit diversification which positively impacts your credit report. However, if you are only utilizing a revolving account, this could be preventing your score from increasing. 

Identity theft or fraud

Unfortunately, identity theft or fraud could be a contributing factor that is negatively impacting your credit score. It is important to familiarize yourself with potential signs of identity theft in order to protect yourself and your credit score. These signs may include receiving bills for items you did not purchase, unfamiliar credit card charges, or a notification that more than one tax return was filed in your name. 

If you suspect you are a victim of identity fraud contact the companies that you believe the fraud happened at and alert them of this concern. Additionally, you should place an initial one-year fraud alert on your credit reports or consider freezing your credit reports. 

Increase your credit score with help

Credit scores can help you drastically when it comes to your financial health. By looking at these 6 reasons, hopefully, you can pinpoint what category is negatively impacting your score. Look for credit building programs or banking options that help you build credit and monitor 24/7.


What will make my credit score go up faster?

Paying your current credit card balances and lowering your credit utilization can be two quick steps to improving your score. But, always remember to make on time payments.

Why is my credit score staying the same?

The reason why is simply because nothing has changed. Use credit building tips, track your progress and make on time payments begin seeing some positive movement.

Is 0% credit utilization bad?

Not utilizing your credit is not necessarily bad, however, you won’t receive credit points that are available for increasing your score. Keeping your credit balance under 30% is always the best rule of thumb.

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