Why Won’t My Credit Score Go Up?

Credit Score Dartboard
Photo by iQoncept / Shutterstock.com

Welcome to your “2-Minute Money Manager,” a short video feature answering money questions submitted by readers and viewers.

Today’s question is about credit scores; specifically, why your score can remain stuck at less than an ideal level even though you’re doing everything right.

For an answer to this question — as well as a brief explanation of how credit scores work — watch the following video. Or, if you prefer, scroll down to read the full transcript and find out what I said.

You also can learn how to send in a question of your own below.

For more information on this topic, check out “6 Ways to Get Your Official FICO Credit Score for Free” and “11 Surprising Ways to Wreck Your Credit Score.” You can also go to the search at the top of this page, put in the words “credit score” and find plenty of information on just about everything relating to this topic.

If you’ve got a debt problem, be sure and visit the debt help page of our Solutions Center.

Got a question of your own to ask? Scroll down past the transcript.

Don’t want to watch? Here’s what I said in the video

Hello, everyone, and welcome to your “2-Minute Money Manager.” I’m your host, Stacy Johnson, and this question is brought to you by MoneyTalksNews.com, serving up the best in personal finance news and advice since 1991.

Today’s question comes from Virginia:

We’re seniors. Always paid our credit card invoices on time. As soon as they arrive in the mail. Never borrowed any money, except for a mortgage, and that’s been paid off for 25 years. And yet, our credit score remains stuck at 748. Why is that?

I’m assuming Virginia is talking about a FICO score, the most commonly used credit score. The highest FICO score is 850. In most cases, anything over 760 might as well be 850, because it will get you the best credit terms and deals. Note that Virginia is already pretty close to that, with a 748.

Still, Virginia’s got a legitimate gripe. Why isn’t her score higher?

Let’s understand how a credit score is determined. For example, one factor is how much credit you’re using, especially in relation to how much credit you have available.

Example: Let’s say you’ve got a credit card with a $10,000 limit and your balance on the card is $6,000. You’re using 60 percent of your available credit. This is called credit utilization. If you were using $1,000 of a $10,000 credit limit, you credit utilization would be 10 percent. Experts recommend you try to keep your credit utilization under 30 percent.

What’s Virginia’s utilization? We don’t know. She says, “We pay off our credit card every month.” That may be true, but at some point in the month — before she’s received or paid the bill — she may have a big balance on her card. If a company happens to pull her score at the moment she’s got a high balance, it’s possible her credit utilization ratio could be high enough to negatively impact her score.

What’s a solution for this potential problem? Virginia could raise the credit limits on her cards, or get an additional credit card. Then, she’ll have more available credit, which could positively impact her utilization ratio.

Another part of credit scores is credit history: How consistently you’ve paid your bills on time. If you’ve always paid on time, every time, for long periods of time, you’ll have a much higher credit score. It sounds like Virginia’s done that.

The remaining part of your credit score is made up of smaller things, including the length of your credit history, the types of credit you have and whether you’re applying for new credit. Let’s look at each.

Length of credit history is self-explanatory: The longer you’ve successfully used credit, the better. Virginia seems to have a long history of responsible credit usage.

As for types of credit, there are two main types:

  • Installment, like a car loan or a mortgage
  • Revolving, like a credit card

The more types of credit you have, the better. Virginia used to have a mortgage — an installment loan — but that was paid off decades ago, so she doesn’t have a diversified credit portfolio. That being said, I certainly wouldn’t advise her or anyone else to take out an installment loan just to raise a credit score.

Finally, there’s “new credit.” Applying for a bunch of new credit, especially all at once, can lower your score. Doesn’t sound like that’s a problem for Virginia.

Now we see there may be a couple of things Virginia could do to raise her credit score above the 750 mark. But here’s something important as well: It doesn’t sound like Virginia’s about to borrow money. So, what does she care?

A lot of people worry about their credit score more than they really need to. If you’ve got a decent credit score — and Virginia does — and you’re not about to borrow money, then just leave it alone. It really doesn’t matter.

It is true that your credit score can influence other areas of your life, like your car insurance rates. Some employers check your credit history before offering you a job. And if you’re going to rent an apartment or sign a cellphone contract, they can check your credit. So, credit does matter. But if you’ve got a 750 credit score, you probably won’t suffer in any of these areas.

Bottom line? Don’t lay awake wondering why your credit score is not higher, Virginia.

Make it a super-profitable day and meet me right here next time!

Got a question you’d like answered?

You can ask a question simply by hitting “reply” to our email newsletter, just as you would with any email in your inbox. If you’re not subscribed, fix that right now by clicking here. It’s free, only takes a few seconds and will get you valuable information every day!

The questions I’m likeliest to answer are those that will interest other readers. In other words, don’t ask for super-specific advice that applies only to you. And if I don’t get to your question, promise not to hate me. I do my best, but I get a lot more questions than I have time to answer.

About me

I founded Money Talks News in 1991. I’m a CPA, and have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate.

Got any words of wisdom you can offer on today’s question? Share your knowledge and experiences on our Facebook page. And if you find this information useful, please share it!

How to find cheaper car insurance in minutes

Getting a better deal on car insurance doesn't have to be hard. You can have The Zebra, an insurance comparison site compare quotes in just a few minutes and find you the best rates. Consumers save an average of $368 per year, according to the site, so if you're ready to secure your new rate, get started now.

Read Next
17 Unusual Things You Can Clean in a Dishwasher
17 Unusual Things You Can Clean in a Dishwasher

Many everyday items do not require meticulous hand washing.

10 Ways Anyone Can Earn More Income
10 Ways Anyone Can Earn More Income

Looking for additional cash? Here are a bunch of options that are accessible to anyone with internet access.

This Pastime Can Keep Your Brain Sharp as You Age
This Pastime Can Keep Your Brain Sharp as You Age

It’s never too late to benefit from taking up this type of activity.

10 Ways to Nail Savings on Your Remodeling Project
10 Ways to Nail Savings on Your Remodeling Project

Here’s how to save on your next remodeling project with discounted materials and more tips and tricks.

20 Generic Brands That Amazon Created
20 Generic Brands That Amazon Created

Amazon’s growing collection of private brands offers everything from toilet paper and coffee to motor oil and clothing.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
Will I Get My Ex-Husband’s Social Security When He Dies?
Will I Get My Ex-Husband’s Social Security When He Dies?

Two factors determine how much money is coming to you.

7 Ways to Boost Your Credit Score Fast
7 Ways to Boost Your Credit Score Fast

Your financial security might soon depend upon the strength of your credit score.

21 Things You Should Always Buy at a Dollar Store
21 Things You Should Always Buy at a Dollar Store

Dollar stores have great bargains on these familiar purchases. Yes, even pregnancy tests.

13 Brilliant Bulk-Buy Items on Amazon
13 Brilliant Bulk-Buy Items on Amazon

Every household should have these products on hand. Buying them in bulk on Amazon saves you cash.

6 Reasons I Will Never Trust Suze Orman
6 Reasons I Will Never Trust Suze Orman

Beware: The self-proclaimed personal finance expert has a track record that suggests more sizzle than steak.

5 Household Disinfectants That Can Destroy the Coronavirus
5 Household Disinfectants That Can Destroy the Coronavirus

You likely already have some of these products at home.

This Type of Social Security Benefit Is Often Overlooked
This Type of Social Security Benefit Is Often Overlooked

The Social Security Administration is not helping certain people get money to which they are entitled, a report says.

Getting These 2 Shots Could Reduce Your Risk of Dementia
Getting These 2 Shots Could Reduce Your Risk of Dementia

These vaccines may lower the risk of Alzheimer’s disease by up to 40%.

America’s Most Reliable Appliance Brand Is a Surprise
America’s Most Reliable Appliance Brand Is a Surprise

Have you heard of this appliance manufacturer?

9 Everyday Problems You Can Solve With Vaseline
9 Everyday Problems You Can Solve With Vaseline

Forget expensive specialty products. Good ol’ petroleum jelly can address many common annoyances.

16 Amazon Purchases That We Are Loving Right Now
16 Amazon Purchases That We Are Loving Right Now

These practical products make everyday life a little easier.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

These jobs pay more than the typical job in the U.S. — and no bachelor’s degree is required.

19 Purchases That Buyers Almost Always Regret
19 Purchases That Buyers Almost Always Regret

Think twice before buying these things.

7 Tips for Building an Emergency Stockpile
7 Tips for Building an Emergency Stockpile

A pandemic or natural disaster could leave you reliant on your existing food supply. Is your pantry prepared?

8 of the Worst Things to Buy at a Dollar Store
8 of the Worst Things to Buy at a Dollar Store

Not everything sold at dollar stores is a great bargain or a safe purchase. Here’s our list of products to avoid.

Homeowners Say These 2 Kitchen Appliance Brands Are Best
Homeowners Say These 2 Kitchen Appliance Brands Are Best

One brand takes five of the top honors, while another ranks highest in three categories.

41 Things You Should Never Buy
41 Things You Should Never Buy

Some purchases are just plain dumb. Give yourself — and your budget — a break. Don’t spend money on this stuff.

9 Indestructible Products That Are Worth the Price
9 Indestructible Products That Are Worth the Price

If you’re willing to pay a little more for these products, you may never have to shop for another again.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.