Every month you sit down and pay each and every one of your bills on time. Then when you look at your credit score, it never seems to get any better. Why can’t you have great credit if you pay your bills on time?

There are many reasons why your credit score could be lower than expected. Therefore, it is important that you know what affects your credit score. But before you do anything else, you need to make sure your credit report reflects all of the accurate information about you. Most people with lower credit scores have not checked their credit report. When they do, they discover that there is inaccurate information. When they fix your problems (through Credit Repair), your credit report will usually reflect positive changes, and then your credit score will go up. Then, once the report is accurate, you can review what you’re doing that might be holding your credit score down.

For example, when you open your wallet, how many credit cards do you have? If you have a lot of credit cards, that could be holding your credit score back. Many lenders consider having too much credit to be a bad thing, so the credit bureaus have added it to the way your credit score is calculated. Then in the cards you have what is the credit limit on each card. If you have a bunch of low-limit cards (less than $500), you want to review what balances you have on those cards. Most people who have lower limit cards have a higher usage rate. For example, if you have a $500 limit on a card and you have a $300 balance, you’re hurting your credit score. You must not have more than 30% balance on each card. Most Americans who have lower limit cards carry them with a maximum balance. That really hurts your credit score. Take the time to review each card you have and compare what the limit is and what the balance is. Some people will actually max out their lower limit cards and barely use their higher limit cards. It is better to balance each card.

Then, after you’ve balanced each card, check your total available credit by adding each card’s limit. Then all the balances owed on the cards. Once you have those figures, look at your income. Some Americans owe almost as much as they can earn in 6 months. If your unsecured credit balance is high, then you have another problem that is affecting your credit score. If you’re using too much of your credit, again lenders consider it risky. This risk turns into negative scores on your credit report. It’s best to keep your balances low so you can help your credit score for future events.

If you visit MyFICO.com, you can get a full breakdown of how your credit score is calculated. Next, you can also find out what your unsecured debt balances should be. This is important when you want to improve your credit score.

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