3 Things Stopping You From Having a Higher Credit Score

If you want your score to increase, you may need to make some changes.

The average credit score for U.S. consumers was 716 in 2022, according to FICO. That's not a bad credit score at all, but it also means there's room for improvement. In fact, to snag the most competitive interest rate on a loan, and to be able to apply for one with confidence, it will help to get your credit score into the upper 700s or above.

But what if your credit score is way lower than that and doesn't seem to want to budge? There are several reasons why your credit score may not be where you want it to be. But here are some habits that could be keeping it trapped in less-than-favorable territory.

1. Being late with bills

Your payment history carries more weight than any other factor when calculating your credit score. But if you're consistently late paying your bills, your score is unlikely to increase.

If you've been struggling with bills lately due to inflation or another factor, put together a budget and start trimming expenses so you can keep up with your bills more easily. You may also want to consider getting a second job to boost your income.

2. Carrying too high a credit card balance

If you make your minimum credit card payments every month, you won't be considered late with your bills -- so that's a good thing. But even so, if your credit card balance is too high relative to your total spending limit, it could drag your credit score down.

Once your credit utilization ratio (a measure of how much revolving credit you're using at once) exceeds 30%, it has the potential to damage your credit score. So if you have a $10,000 spending limit across your various cards but are carrying a $5,000 balance (50% utilization), your score might get stuck where it is -- even if you're timely with your minimum payments. Bringing that balance down to $3,000 or less, on the other hand, could help your score improve.

Now, you're most likely not going to magically come up with $2,000 out of nowhere. But if you're willing to work a side hustle for a while, you might manage to scrounge up that cash fairly quickly. So that's an option worth considering. And if you're getting a nice tax refund this year, that's money that could go toward whittling down your balance, too.

3. Not checking your credit report

You may not feel compelled to check your credit report all that often. But you should make a point to check it every few months. If you don't, you might sentence yourself to a lower credit score than you deserve.

It's not uncommon for credit reports to contain errors. And if yours has a mistake that paints you in an unfavorable light, like a delinquent debt you settled many years ago, it could be dragging your credit score down. You won't know about that mistake, however, if you never check your credit report.

You should also know that this year, credit reports are available for free on a weekly basis. So there's really no excuse not to pull yours and give it a read. And if you're worried that checking your own credit report will hurt your credit score, rest assured that it won't.

A higher credit score could make it easier for you to borrow money when you need to, and at a more affordable rate. So if you've been paying your bills late, carrying a large credit card balance, and neglecting your credit report, it's time to break those habits for the sake of seeing your credit score rise.