Why Your Credit Score Isn't Changing And How To Improve It
A healthy credit score is essential for American personal finance. If your credit score isn’t changing, we’ll explain why and how to improve it.
Checking your credit score is important, but you might notice that your credit score is not changing. We’ll explain why you’re not seeing a change, how to increase your credit score fast with credit card payments, how fast you can raise your credit score realistically, ways to improve your credit score without using credit cards, and how you can fix your credit for free.
Why your credit score isn’t changing
If you’ve recently paid off a large debt, you might excitedly check your credit score to see how much it’s improved, given that utilization (how much credit you’re using compared to have much you have) is a big part of your credit score.
The change won’t be immediate. Typically lenders report updated balances, payment activity, changes to credit limits, etc., to the credit bureaus every 30 days, but some may follow a different timeline. Anything you do to improve or worsen your credit won’t show up in your score for a few weeks.
Credit takes time to grow, something that can be frustrating for new immigrants trying to establish credit history in the U.S. On-time payments are the most significant factor in your credit score, and the more you have, the better. So if you’ve just opened a credit card, it will take time to build up those on-time payments.
Age of credit is another factor in your credit score; the older, the better. This is part of the reason it’s a bad idea to cancel a credit card; it lowers the age of your credit history (it raises utilization too).
While most financial institutions report consumer activity to all three of the main credit bureaus, Equifax, TransUnion, and Experian, they aren’t required to. Depending on where you’re seeing your credit score, it could be that one of your creditors doesn’t report to the bureau responsible for the score you’re seeing.
How to improve your credit score in 30 days
The fastest and most impactful way to improve your credit score is to pay down debt and decrease utilization. Dramatically bringing down utilization can raise your score dozens of points as soon as the new balances are reported to the credit bureaus.
Late payments are the most significant factor in your credit score. A single late payment can really drop your score. Always make your credit card and loan payments on time. Opening an additional credit card can give you another on-time payment (and decrease utilization), as can taking out a loan. But taking out additional credit also temporarily drops your score by a few points. It’s just one of the many crazy parts of the credit system!
How to improve your credit score without credit cards
Another part of your credit score is credit mix, having both revolving and installment. Revolving credit includes credit cards; you make charges, pay the balance (or at least the minimum payment), and can make new charges ongoing. Installment credit includes loans; personal, business, mortgage, auto, etc. You make a fixed payment each month until the loan is paid in full.
If you only have one type, opening the other can improve your score. And there are credit builder loans explicitly designed to help build credit.
If there is incorrect information on your credit report, having it removed can improve your score. Experian Boost is a free service offered by the credit bureau. The service will report your on-time payments for things that typically aren’t reported to credit bureaus, including your phone, utilities, and even some streaming services payments.
Avoid services that promise to “fix” your credit score. At best, they aren’t doing anything you can’t do yourself for free (correcting misinformation on your credit report), and at worst, they are doing shady things on your behalf that you would be held responsible for if caught.
Upwardli Can Help
Upwardli was created with the needs of newly arrived immigrants to the U.S. in mind. And part of those needs is the need to build credit. We can help! You can start building credit along with your new life today with Upwardli.
