Keeping an eye on your credit score is a great way of monitoring your financial progress. But what should you do if your score never seems to change?
If you’re trying to improve your chances of getting accepted for finance, you’ll know what it’s like to keep checking your credit score every month.
While it’s true that your credit report will update every month, that doesn’t mean your score will change. Take a look at the main reasons why your credit score might not have improved:
1) It takes time to prove you’re reliable
If you’ve recently got a credit card or loan and you’ve been making your repayments on time, you might be wondering why your credit score hasn’t suddenly shot up. After all, isn’t that what improving your credit is all about?
While consistently making payments on time is a positive factor when it comes to your credit score, the key word is ‘consistently’.
Lenders prefer to see a long-term pattern of responsible borrowing. To reassure them it’s not just a one-off streak, you’ll need to show them that you can handle debt over a longer period. This means it’ll take at least a good few months before your reliable borrowing starts rub off on your credit score.
2) A lender hasn’t reported something
Good or bad, if something related to your borrowing has changed, your lender should report this to the credit reference agencies (CRAs) who update your credit score.
Have you finally paid off that car finance? Reached the end of your loan? Or maybe you’ve missed a payment? Your lender should report updates like these to the CRAs – who will then use this information to update your credit report.
But while lenders should report these changes, they won’t always. For example, if you’re usually a reliable borrower but you slipped up and missed a payment, your lender might not report this.
Or, if you’ve paid off a loan or closed a product down, your lender might not have told the CRAs yet. In which case, it’s worth giving them a call to make sure they chase this up for you.
3) There’s not enough variety on your report
Let’s say you’ve been steadily paying off a loan for a while. Every time you meet your monthly repayment, a tick will go towards your positive repayment history – great! But after a while, this can start to look a little predictable.
Lenders like to see you juggle different kinds of credit. A credit card is ‘revolving credit’ – this is where you control the amount you borrow and pay back each month. By contrast, a loan is ‘non-revolving’ – the amount you borrow and repay each month is fixed from the start.
If your credit score isn’t changing, it could be that you need to add some ‘revolving’ credit to your report. This could boost your score as it proves that you can manage different kinds of debt.
4) Your level of risk has stayed the same
When it comes to improving your credit score, things aren’t always black and white. Your credit report is there to paint an overall picture of how reliable you are as a borrower.
So, if you’ve built a reputation as a responsible borrower, a one-off blip might not change how lenders view you. On the other hand, if you’ve got an adverse credit history, a small improvement – like making a few payments on time – isn’t likely to improve their opinion overnight.
This is because any changes that have taken place might not be big enough to change how lenders think of you overall. So, if your level of risk seems the same, your credit score could stay the same even if certain things on your report have updated.
5) Updates don’t show up immediately
If you’ve just opened up a new credit account, you might expect to see your score change when your new report becomes available.
However, although your report updates every 30 days, it can take 4-6 weeks for new account information to appear on your report. This is because the credit reference agencies need to wait to receive the information from the lender.
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