Why Your Credit Score Is Low (And How To Fix It)

Many people discover their score has dropped or isn’t where it should be when applying for a credit card, loan, or mortgage. The good news is you can usually fix it—once you know what’s behind the number.

Below, we break down the most common reasons credit scores fall, the impact each factor has, and how to fix it step-by-step. Whether you're trying to qualify for a better interest rate, a premium rewards card, or a home loan, improving your credit score can lead to real savings.

What Causes A Low Credit Score?

A credit score—typically ranging from 300 to 850—is a snapshot of your financial reliability. Here’s what tends to bring it down:

Late Payments

Your payment history makes up about 35% of your FICO score. Even a single missed or late payment on a credit card, personal loan, or utility bill can knock your score down by 90–110 points.

Fix:

• Bring all your accounts current.
• Set up autopay or reminders.
• Contact your lender if you're behind—they may offer hardship options or payment plans.

High Credit Utilisation

This refers to how much of your available credit you're using. If you're using more than 30% of your total credit limit, it can significantly lower your score.

Fix:

• Pay down balances, especially on revolving accounts like credit cards.
• Ask for a credit limit increase (but avoid a hard inquiry if possible).
• Spread balances across multiple cards instead of maxing out one.

Example: If you have a $10,000 limit and owe $5,000, your utilisation is 50%—which is too high. Paying it down to $2,000 (20%) can boost your score within 30 days.

Too Many Hard Inquiries

Each time you apply for credit (credit cards, car loans, mortgages), the lender checks your credit—this is a hard inquiry. Multiple inquiries within a short time can lower your score.

Fix:

• Only apply for credit when necessary.
• Use prequalification tools from banks like Capital One or American Express, which use soft pulls and won’t affect your score.

Short Credit History

Length of credit history makes up 15% of your score. If you're new to credit or have recently opened several accounts, your score might be lower even without missed payments.

Fix:

• Keep older accounts open, even if you don’t use them often.
• Add yourself as an authorised user on a family member's account with a long, positive history.

Account Charge-Offs Or Collections

If a lender writes off your debt or sends it to collections, your score can drop drastically. Even paid collections can hurt if they’re recent.

Fix:

• Settle or pay off the collection—some lenders will remove the entry once paid.
• Ask for a “pay for delete” agreement before paying.
• Dispute errors on your credit report through Equifax, Experian, or TransUnion.

Derogatory Marks (E.G., Bankruptcy, Foreclosure)

These are severe and long-lasting score killers. A bankruptcy can drop your score by 150–200+ points and remain on your report for up to 10 years.

Fix:

• Rebuild slowly with secured credit cards or credit-builder loans.
• Make every future payment on time.
• Monitor your report regularly for any changes.

How To Check What's Hurting Your Score?

Before you can fix your score, you need to know what’s on your credit report.

Free Ways To Check

AnnualCreditReport.com – Get free reports from Equifax, Experian, and TransUnion.

Credit Karma – Offers free VantageScore-based reports from TransUnion and Equifax.

Experian – Free FICO score and monitoring with account signup.

Look For

• Missed payments
• High balances
• Collections
• Incorrect information

If you spot an error, file a dispute with the bureau that reported it. Errors are more common than most people realise.

How To Start Improving Your Credit Score Today?

Pay On Time—Every Time

This is the fastest and most effective way to start improving your score. Set up autopay or use budgeting apps to stay on track.

Use A Secured Credit Card

Cards like the Discover it® Secured or Capital One Platinum Secured report to all three bureaus and can help you build history if you’re starting from scratch or recovering from a low score.

Use Credit Builder Loans

Available from online lenders or local credit unions, these loans are designed to help you build or repair credit. You make monthly payments into a locked savings account, then get the money (and a better score) at the end.

Ask For A Limit Increase

If you have a good payment history with your card issuer (like Chase, Citi, or Bank of America), request a higher limit. It lowers your utilisation and can increase your score.

Become An Authorised User

Being added to someone else's card (such as a parent or spouse) with a good credit history can help your score. Make sure the issuer reports authorised users (most major banks do).

Which Credit Cards Help Rebuild Credit?

If your score is below 600, start with cards that are designed for rebuilding:

Best Options

Discover it® Secured Credit Card

• No annual fee
• Matches cash back for the first year
• Reports to all three credit bureaus

Capital One Platinum Secured

• Low deposit options ($49, $99, or $200)
• No annual fee
• Prequalification available

Chime Credit Builder Visa®

• No interest, no annual fee
• No credit check to apply
• Works more like a prepaid card with credit reporting

These cards require a refundable deposit but are easier to get approved for, even with bad credit.

How Long Does It Take To Fix A Low Credit Score?

Improvement can start in as little as 30 days if you reduce credit utilisation or remove errors. That said:

• 30–90 days: Pay down balances, settle any collections, avoid new inquiries.
• 6–12 months: Build new history with on-time payments.
• 12+ months: See significant improvement if you stay consistent.

A 100-point gain in 6 months is very possible with the proper steps.

Final Thoughts: What To Do Next?

To improve a low credit score, start by checking your credit reports for errors and paying all bills on time. Focus on reducing credit card balances and avoiding unnecessary credit applications. Use tools like secured cards or credit builder loans to rebuild your credit profile. Be consistent—small actions lead to steady gains. Compare options from trusted issuers like Capital One, Discover, or Chime to take the next step toward stronger credit.