Why Is My Credit Score So Low?

 Benefits of Having a Good Credit Score 

  • Confidently Apply for Loans: Lenders will be looking for a clean credit history, as well as your income and existing debt. By having a good credit score, you can increase your chances of being approved for a loan or a credit card
  • Easier Approval for Housing Rentals: Increasingly, landlords are checking potential tenants’ credit score as part of the application process. A bad credit score may indicate a previous eviction or outstanding rent balance, which can minimise your chances of getting that apartment
  • Decrease Interest Rates on Loans: Having a good credit score increases your chances to qualify for the best interest rates. This means you’ll pay a lower charge on accumulated credit card loans and can take advantage of other offers from lenders or companies that negotiate based on your credit score
  • Better Car Insurance: Ca insurance companies commonly use your financial information from your credit report and insurance history to develop your insurance risk score. Having an excellent credit score will typically help you qualify to pay less for insurance

 What Affects Your Credit Score and How You Can Ruin It 

  • Financial Invisibility: Almost 6 million people may be losing out on building a good credit score because there is insufficient information about their financial history. Young people who rent homes or spouses whose names aren’t on joint accounts or utility bills are some of the many whose credit scores are affected negatively by their invisibility financial history because they cannot prove their reliability
  • Late Payments: On the other hand, if banks or credit card companies can see you are an unreliable spender, they will be less likely to lend you that loan. For example, your credit score may be low because you are making late payments on your PECO utility bill
  • Applying for Too Many Credit Cards at Once: Having access to extra credit through multiple credit cards may be helpful for emergencies but credit lenders may be wary to give you access in the first place. This is because credit inquiries account for 10% of your overall credit score. Every time you apply for a credit card, you will get a hard inquiry, which will cause your score to drop slightly
  • Inaccurate Information: Although mistakes happen, it’s imperative to dispute any negative accounts on your credit history as soon as possible. Check your account regularly to make sure no inaccurate information is present

 Credit Score Tips 

  • Boost Your Score by Piggybacking: Piggyback off of a trusted family member’s credit by having them add you as an authorised user on their credit card. This option is perfect for millennials who don’t have large or frequent payments to make but still want to get ahead on building credit. What else is great is that since you’re not the primary account holder, you are not liable for the card itself.
  • Don’t Ignore Past Due Bills: If you already have a credit card, avoid accumulating debt from it by paying your balance each month. Show you’re a reliable spender by making payments on time and not taking out credit you’re unable to pay. The VP of Membership and Public Relations at the National Foundation for Credit Counselling (NFCC) recommends you should never exceed over 30% of your available credit
  • Diversify Your Credit Mix: Having a diverse portfolio of credit accounts will better your chances of increasing your credit score. This may include a car loan, student loan, or a mortgage. Your credit mix accounts for 10% of your FICO Score.


There are many factors that affect your credit score. Since having a good credit score can open many opportunities, it’s important to understand what’s affecting it and how to manage it to your advantage sooner rather than later.

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