Most consumers are not sure why their credit scores won’t increase. There is nothing more frustrating than looking at your credit score every week or month only to see the same number. There are few reasons why your credit score won’t increase.
1. Problem: No Current Credit Card History
This is the #1 culprit on most the credit reports I see on the daily basis. Most consumers are afraid to get a credit card. Many consumers had said that their parents or friends told them how credit cards are bad for you. Another reason they mentioned was that they didn’t want to accrue debt. All of this comes from lack of knowledge about how credit cards work for and against you. I wrote an article on this not too long ago—-Read: How Credit Cards Work.
Solution: Get A New Credit Card
The easiest way to solve this is to get the right credit card for you and your credit score. Most consumers apply for the wrong credit cards and end up getting denied or having to pay a deposit. If your score is above 550, you should apply for a Fair Credit Score Credit Card. If your score is under 550, you should apply for a Secured Credit Card. Be sure to read my article above to use credit cards the right way and see a big increase in your credit score.
2. Problem: Great Payment History Every Month, But New Collections As Well
Another problem most consumers have is doing everything right by paying bills on time and keeping low credit card balances. But their problem is simply forgetting about old unpaid accounts that have become “Collections.” Collections hurt your credit score tremendously and sometimes by 40 points or more! On time payments increase your score but it can only go so high if there are collections that put a ceiling on the progress.
Solution: Pay The Collections & Ask For A Dispute Online
Many consumers think that when you pay a collection in full or a settlement, that it will be removed from your credit report or that your score will increase. That is incorrect. Once the collection is paid, you must ask them to remove it from your credit report and/or dispute it from your credit report. The FCRA does not allow accurate information to be removed but in most cases they will remove it from the credit report if they see that it is paid and viewed under investigation in less than 30 days.
3. No Recent Activity On Accounts
Some consumers have not swiped their credit cards or opened a new account in a while. I am not saying add debt. I am saying that if you have cash, its okay to swipe your credit card and pay the bill on your phone or computer when you get home. Its simply showing creditors that you still can pay on time and that is what credit is all about.
Hopefully, this has helped some of you as I see credit scores that don’t increase all the time. If you practice good credit habits, you will always be a FICO High Achiever (780+). Thanks for reading and I will see you in the #850club!