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Why Your Credit Score is Low

Boosting your credit score can be a tricky process and often a difficult one to undertake successfully. One mistake can send your score spiraling down, while building it back up can take a long time and hard work. The following are a few of the reasons why your score might be low, even if you've been following all of the right rules.

  • You have a high balance. Even if you pay off your card fastidiously every month, running up a high balance every month could lower your credit score. Credit companies are wary of people who consistently carry high credit, believing they could make a mistake at any point and later be unable to pay.
  • Your credit history is short. If you recently got your credit card or took out a loan, then your history is too short for a credit company to be able to trust you fully. Therefore, your credit score may be lower than you expect, simply because you haven't had time to build it up.
  • There's a mistake. As frustrating as it may be, errors occur on credit card statements more often than you might think. One in five consumers reports an error on their credit report, either due to inaccurate reporting, miscalculation, or some other filing problem.
  • You have more cards than you use. When you continuously apply for cards that are newly released, the chances of accidentally missing a payment increase. Even if you have a history of paying off your cards on time, your credit score could still suffer from having too many cards.

Talk with your credit card company or seek credit counseling to see if your credit card score may be affected by any of the above factors.

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