Why is my fico score lower than my credit score

1. You've Missed Some Payments

Your record of making timely or late payments to credit card issuers and other lenders is the No. 1 factor in calculating your credit score. Your payment history makes up about 35% of your FICO® Score☉ , which is the credit score used by 90% of top lenders.

While your creditor may consider your payment late if it's just one day past due, a late payment won't get reported to the credit bureau unless it's at least 30 days past due. Just one late payment on your credit report can lead to a big drop in your credit score.

A late payment normally stays on your credit report for seven years, but the effect on your credit score becomes less severe over time. By consistently making on-time payments after missing some, you should see your credit score rise.

2. Your Debt Balances Are High

The amounts owed on your debt accounts (loans and credit cards) is one of the most important factors in your credit score.

Loans you're closer to paying off contribute more positively to your score than balances you're just starting to pay off. And credit card balances specifically impact what's known as your credit utilization ratio, which is the amount of revolving credit you're using divided by your credit limit.

As your credit card balances go up, along with your credit utilization ratio, so does the risk you present to a lender. For that reason, it's recommended for the benefit of your FICO® Score or VantageScore® that you keep your credit utilization ratio as low as possible, or at least under 30%. This means that if your total credit limit for all revolving credit accounts is $10,000, your total credit balances debt shouldn't be above $3,000.

3. You Have a Limited Credit History

A limited credit history could be yet another reason why your credit score isn't increasing. Data that goes into figuring out the length of your credit history includes:

• The average age of your accounts
• The age of your oldest account
• The amount of time since you last opened an account

A longer credit history is generally a positive for your credit score, while a shorter credit history is generally a negative. A limited credit history can, therefore, keep your credit score from rising.

What can you do to improve your credit history? In many cases, it may be a simple matter of waiting, as it takes time to bulk up your credit history.

You might be able to speed things along by becoming an authorized user on a family member's credit card. When you're an authorized user, you enjoy the benefit of the primary cardholder's credit history and can use the card to make purchases (if the primary cardholder agrees). If the primary cardholder makes on-time payments and maintains a low balance, your credit score could improve.

Keep in mind that for this approach to work, the issuer of the credit card must report you as an authorized user to the credit reporting companies.

4. You've Submitted Too Many Credit Applications

When you apply for new credit and a lender checks your credit reports, it triggers what's known as a hard inquiry.

A couple of hard inquiries as you're routinely applying for a loan or credit card might have little, if any, effect on your credit score. But a slew of recent hard inquiries that appear on your credit reports could make you a riskier borrower in the eyes of lenders and credit scoring models. Several hard inquiries over a short period could be a factor preventing your credit score from going up.

To help lift your credit score, try keeping the number of hard inquiries to a minimum. Hard inquiries might remain on your credit report for two years, yet the effect on your credit score decreases as time goes by.

5. You Only Have One Type of Credit Account

Your credit mix, or the variety of installment credit accounts and revolving credit accounts in your name, represents 10% of your FICO® Score.

An installment credit account is a loan you make fixed payments toward over a set period of time. Once the account is paid off, the account is closed. Installment accounts include mortgages, auto loans, personal loans and student loans.

A revolving credit account, such as a credit card, typically requires a minimum monthly payment, but can be borrowed from and repaid repeatedly. The minimum payment on a revolving account can fluctuate depending on your balance.

Having a variety of credit accounts shows lenders and credit scoring models that you're able to manage several types of debt. Improving your credit mix may raise your credit score, but you should avoid taking on new debt solely to improve this scoring factor.

6. A Creditor Has Incorrectly Reported Account Information

If a creditor has incorrectly reported information about one of your accounts, such as a late payment that never happened or a too-high balance, it may be dragging down your credit scores. Mistakenly reported information that appears on your credit report could include:

• Closed accounts that appear on your credit reports as open accounts
• Accounts that are incorrectly listed as having late or delinquent payments
• The same debt listed at least twice
• Credit limits for accounts that aren't accurately reported

If you spot information on your credit report you believe to be incorrect, you can dispute the information by contacting the credit reporting company that produced the report. You can also directly contact the creditor that sent the data to the credit reporting company.

Checking your credit report on a regular basis allows you to promptly catch and correct errors that could be dragging down your credit score. Experian lets you look at your Experian credit report and your credit score based on Experian data at no cost. You can view your credit reports from all three credit bureaus for free through AnnualCreditReport.com.

Get Help Improving Your Credit Score

If your credit score isn't climbing at the speed you want it to be, check out Experian Boost®ø.

Experian Boost could help you instantly improve your FICO® Score by giving you credit for on-time utility, telecom and certain streaming service payments. Experian Boost can be especially helpful if you have little to no credit history.