Right below, there are a few reasons why your Experian credit score is lower than expected. Knowledge of what affects the score is therefore useful in working towards having a higher score in the future.
First of all, it makes sense to find out what factors influence your Experian credit score. This score is between 300 and 850, and the higher the number, the lower the risk you are to lenders. The score depends on the data contained in your Experian credit report. Key aspects that influence your score include:Key aspects that influence your score include:
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Credit history – This refers to the ability of an individual or organization to meet their financial obligations as and when they are due. This has the greatest bearing on your score.
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Credit utilization - This is the amount of credit you are currently using in relation to the total amount of credit available to you. Lower percentages are better.
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Credit history length – As a rule, the longer credit history a consumer has, the better.
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Total accounts – The overall number and distribution of accounts, including installment loans and revolving credit.
- New credit - This is a situation where an individual opens many accounts and within a short period they will affect his/her credit.
Well, that is in a nutshell your Experian credit score that quantifies your overall creditworthiness on the basis of these and other parameters. It is also important to understand these key ingredients so that one can target certain aspects.
Why Is Your Experian Credit Score Lower Than Expected?
If your Experian credit score is lower than you anticipated, here are some potential reasons:If your Experian credit score is lower than you anticipated, here are some potential reasons:
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Late Payments
The most important factor that determines the credit score for the Experian credit check is payment record. If you have late payments arising on your Experian credit report, this can severely affect the score. You can get penalized for a one or two payment and the extent of the penalty increases with the number of late payments you have.
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High Credit Utilization
Reducing your credit limits and maintaining high balances as a percentage of your total credit limits hurts your score. It is advisable that this percentage should not exceed 30% on any of the cards and in total for all the cards. The lower the figure the better it is for your score. If you have been utilizing higher percentage of your credit limit in the recent past, then this can be another reason for your score to drop.
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Opening New Accounts
If you open more credit accounts, especially within a short timeframe, it is likely that you will see a low Experian score. Every new account adds to the list and tends to decrease your average account age and also contribute more to the total accounts. Never apply for all at once and be careful with store cards since people tend to use them frequently.
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Credit Inquiries
Excessive credit checks, which occur when you apply for credit, can also decrease your Experian credit score on the short term. Every request proves you filled the application for more loans recently, and you were planning to incur more credit risk, enhancing your score in scoring algorithms.
- Lender Reporting Differences
Different lenders may not use similar reporting frequencies for account activity. One bureau may have more current negative information than another due to differing data timing between the bureaus. This implies that you may find that your scores vary depending on the bureau that you are comparing.
Experian Credit Score: Ways to Boost Your Rating
If your Experian credit score is lower than expected, there are things you can do to help increase it over time:If your Experian credit score is lower than expected, there are things you can do to help increase it over time:
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Remit all bills in due time in the future
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Avoid using credit cards that have balances more than 30 percent of the credit limit.
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Freeze the creation of new credit applications for a while
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Check your Experian credit report for errors regularly
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For errors, it may help to reach out to the creditors or apply for goodwill deletions
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Use your credit card sparingly, charge only what you can afford to pay off and avoid carrying balances from month to month
- One of the practical recommendations is to try to become an authorized user to have positive credit history.
There is always the attainment of a higher score after taking such improvement steps; therefore, be patient and continue doing it with a strong and unrelenting spirit. Always remember to make your free Experian report check so that you have all the details required for the monitoring process. Experian score takes time to improve due to the time that it takes to practice and exhibit responsible credit behavior.
