We have written extensively in the past about how to improve your credit score, and to keep on top of your report. But for many, despite constant attempts to better their rating, they see little or no improvement. We have examined some of the main reasons why your credit score may stay the same.
Because Your Information Is Static
A credit reference agency determines your score. It’s calculated using all of the information in your report and how that information will appear to a lender (i.e. whether you’re a high or low risk borrower). If your report indicates that you are a low-risk borrower, you will most likely have a higher credit score. But sometimes information can change on your report and a lender will not see it as important to their decision as to whether to lend or not.
This means that a minor change to your credit report may or may not have an effect on your score. Another thing to keep in mind is that modifications to a credit report will have varied consequences for various people. Individual factors, such as missing a single payment or submitting a credit application, will have varying effects on each person’s score, depending on what else is on their credit report.
If you miss a payment but have a strong credit history, it is less likely to affect your score than if you have a history of poor debt management. It all depends on the overall appearance of your report.
Why Your Credit Score May Stay The Same – Wider Picture
Adding a single positive element, on the other hand, may not have enough of an individual influence to quickly improve your score if you have a number of bad factors.
However, in the long run, it can make a difference. The more good steps you take, the more you’re creating the foundation for a higher score down the road. If you use your credit card once and pay it off, your credit rating may not be affected right away. However, if you continue to pay your bill in full each month, lenders will see that you are dependable. This will almost certainly improve your score in the future.
Why Your Credit Score May Stay The Same – Patience Is A Virtue
The simple fact is that some changes to your credit report will not have immediate impact.
As a result, taking actions to raise your credit score will help to improve the general health of your credit report and increase your lender standing. When considering whether or not to lend to you, lenders will consider your entire record, not just your score. This means that even if the positive information on your report does not affect your score, it is still valuable.
Why Your Credit Score May Stay The Same – Some Lenders Prefer Variety
This is all about the many types of credit products and accounts you have, and it’s one of the reasons your credit score may stay the same for a long time.
Your rating can also remain quite stable if the number of credit accounts you have and how you use credit has remained generally constant. That isn’t inherently a bad thing, but it is important to be aware of.
Your credit score may not change very often if you only have one credit card that you’ve had for years and nothing else changes on your credit report. This is due to the fact that nothing changes dramatically from month to month.
Some Changes Take Longer Than Others
The final reason your credit score may have remained unchanged has to do with how it is calculated.
A credit reference agency determines your credit score (CRA). Lenders send information to each CRA about your credit and how you manage it. Other information about you is also received by CRAs, such as public documents such as electoral roll information. Lenders normally transmit information to CRAs once a month, with some public records agencies sending information more frequently.
When lenders and other organisations do this, however, is entirely up to them. Thus some information may be delayed, and not appear until your report is updated the following month.
