Credit Repair Blog | Educate Yourself.

Poor Credit History

The obvious most common offender of a credit score is poor credit history. Not all bad credit is the result of purposeful neglect. In fact, many people do not even discover that their credit is below the national average score between 673 and 695 (depending on which scoring model is used) until they are put in the embarrassing position of finding out at the time of applying for goods or services. Oftentimes, it is only at these times a medical deductible, late payment, or even an unknown account is discovered.

This is why it is important to regularly check your credit monthly, or at least prior to application for anything that will result in an inquiry to your credit report. You can do this without causing any inquiry or damage to your scores using a credit monitoring service. Our readers can obtain a $1 "No Inquiry" 7 Day Trial which includes all 3 Bureaus and VantageScores® HERE.

Improper Mix of Credit Types

Many of our readers report that they pay all of their accounts in a timely manner, keep low balances on their accounts, and don’t allow their credit to be run unless absolutely necessary. They also report that while they follow these steps religiously, they cannot seem to get their credit scores to move upward. This is usually due to an insufficient balance of the proper mix of credit types. It is vital to have multiple credit types for a healthy credit score.

This mix would include both revolving and installment accounts

A revolving account (like a credit card) would have a borrowing limit and a variable monthly payment based on the current balance. An installment loan (like a car or personal loan) has a fixed monthly payment and closes once the balance has been completely paid in full. For revolving credit types, you can select from various cards for all levels of creditworthiness on our Build Credit Now page. For Installment credit for all levels of credit, and with no inquiry, you can select a Self Lender account. This reports to all 3 bureaus monthly while building a savings account for 12 months. If you are not sure of what your credit profile might be missing, you can have Speedy Credit Repair complete a free review and consultation for you HERE.

Short History of Time Reported on The Bureaus

If you are new to credit, or you are rebuilding from a profile that has little or no credit items due to aging off items, you are likely missing out on what makes up about 15% of your total credit score. There is no time machine to change this, but you can actually age your credit profile for free. See our article: How To Legally Age Your Credit.

Revolving Credit Card Balances Too High

While most so-called "experts", as well as each of the 3 major credit bureaus, recommend using no more than 30% of your total credit card limit to avoid lowering credit scores, using below 20% of the limit will produce significantly higher score results. Why this information is not published by the bureaus will be explained in another publishing called: The Credit Bureaus Number One Client. Your credit utilization percentage is responsible for about 30% of your score.

Stale Credit Activity

Let’s say you have $0 balances on all accounts, the correct mix of credit types, and a long history of perfect repayment. While this may seem the proper use of your credit, it could result in a lower, or missing credit score. This can occur when there is no activity on any of your accounts for an extended period of time. At 3 to 6 months of no activity, credit scores can be lowered because the scoring system does not see what it considers “recent activity” in which to base a person’s current ability to repay. After 6 months of no activity, it is very possible that an inquiry of your credit would return with no score. This can be corrected by simply utilizing a very small amount of an open revolving account, and paying it off over a few months. It is a good idea to rotate the use of existing revolving accounts every few months to prevent the card issuer from reducing your credit limit, or possibly closing your account due to non-activity. A closed card will reduce the amount of available revolving credit, which in turn may lower your scores.

Too Many New Loans or Applications

Even if you apply for 5 credit cards on the same day and are approved, the result may be a lower credit score for a long period of time. It may appear to the scoring system that you are desperate for cash access via these cards, making your new available credit limits a liability rather than an asset. Multiple inquiries would not affect your score more than 1 inquiry for the same purpose in a two-week period or possibly longer, but a would-be lender may give a second thought to approving you for a needed loan because of the visual effect of multiple inquiries.