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Three reasons your credit score stays low

On Behalf of | Dec 9, 2022 | Credit Repair

Illinois lenders are strict about credit scores. The lower your score, the harder it is to get a good loan in Chicago. A low credit score can affect other areas of your life as well. And it’s frustrating when you try to raise your score, but it’s just not moving.

Why isn’t your score getting better? There are several possible reasons why your credit score is lower than you’d like. Check if any of the following reasons apply to you.

Victim of identity theft

There were 117,056 cases of identity theft in Illinois in 2021. When someone steals your identity, they can open accounts in your name. The thief can also use your credit card number. This fraudulent activity can ruin your credit without you knowing about it. You might want help with your credit issues if identity theft ruins your credit.

A credit card with a high balance

You might pay your credit card bill on time every month. That’s great, but it’s possible that the balance you owe is still too high. The amount of credit you use affects your credit score. Even if you pay your bill on time, your credit utilization ratio is possibly too high.

A credit utilization ratio below 30 percent can improve your credit score. Anything above 30 percent can hurt your credit score. You have to do the math to see where you stand. For example, consider a card with a $5,000 limit. You go on vacation and spend $2,000. That’s 40 percent of your available credit.

Short credit history

A short credit history lowers your credit score. Illinois lenders like a history that shows on-time payments. Without that history, your creditworthiness takes a hit.

Putting a small expense on a card and immediately paying it off can help build your history. It takes time to raise your credit score. But following good credit habits will result in a higher score.