Paying down credit cards but your score is dropping? Why? | Refresh Financial

Official blog of Refresh Financial

Paying down credit cards but your score is dropping? Why?

Paying off credit cards


So, you’re pouring money into paying down your credit cards, trying to lower that balance as much as you can. You’ve put your tax return towards paying down your card, and the bonus you got at work. You’ve found an income booster to bring in more money every month and you’ve even cut your bills significantly and used the savings to start paying off credit cards.

But when you check your credit score, nothing seems to have changed. Why?

There are several possible reasons why your credit score has not improved, despite your hard work at paying down your credit cards. These are:

You haven’t given it enough time!

It takes a bit of time for your actions to be reflected in your credit score. If you’ve just paid off half your credit card debt a week ago, the chances of your credit score changing in that time are slim to none. Wait a few months before checking the effect it has on your credit score.

You have other debts that are being neglected

You have to make sure you’re paying off your other debts regularly and on time, not just your credit cards. If you’ve missed a payment here or there, your credit score will suffer regardless of how much you’re paying down your credit card balances.

You have other debts that are keeping your credit usage and debt-to-income ratio high

Even if you’re chipping solidly away at your credit card debt, your entire debt amount vs what you bring in holds quite a bit of weight when it comes to your credit score. You have to bring these ratios down in order to see your credit score reflect your hard work.

You have a bankruptcy on file

If you’ve declared bankruptcy in the last 6 years, your credit report is going to have it listed, visible to any and all potential lenders. It takes 6 years to see this disappear from your credit report, at which time, providing you have been kept up with all of your debts and payments, your score will likely improve.

You have a consumer proposal on file

If you’ve agreed to a consumer proposal within the last three years, it will still be listed on your credit report much like a bankruptcy. This will have a negative effect until it is taken off of your report - three years from when you agreed to it.

You’ve applied for too much credit recently

Your score can drop if you have too many credit checks in a short amount of time. Lenders see this as risky behaviour as it tends to indicate you're desperate to get some cash. Try to space out your credit applications by at least half a year to avoid this.

There are incorrect or fraudulent entries on your credit report

No one thinks identity theft is going to happen to them until it does. Check your credit report. Go through it with a fine-toothed comb. This will make sure you spot any errors or fraudulent items on your report, such as instances of identity theft. It will also highlight everything you have to fix to ensure your score goes up.

Credit card debt is just a part of the problem when it comes to your credit score. There are so many factors that go into calculating your score that it can feel like a juggling act. It comes down to habits, and once you get yourself into some good habits, it’s easy from there. Stay on top of what you owe, your payment dates and your credit report, and you should start to see that number rise.

If you would like to see your credit score increase, and fast, check out Refresh Financial's custom credit building solutions!

Leave a Reply

Your email address will not be published. Required fields are marked *


55 − 48 =

    What Canadians are saying about Refresh

    I would like to thank Refresh Financial for helping me get out of a bad spot. I never thought it was possible and almost gave up on things and then I saw Refresh Financial and and gave it a try. At first I was unsure of things but to see my credit score now makes me a believer in this program.

    – Aaron A

    “It hasn’t even been a year yet, possibly only 6-7 months, and my TransUnion score has gone up over 100 points. That was only the tip of the iceberg as recently I was able to get a consolidation loan from my bank that allowed me to move forward and make things easier for me. Talk about second chances!”

    – Angelica M

    “I am now in a position where I am able to obtain credit (just bought a brand-new car and refinanced my mortgage for a fantastic rate) and it took little to no time at all. I would 100% recommend Refresh to anyone looking to rebuild credit with as little hassle as possible.”

    – Cathy M

    “I had not heard of a company doing such a thing before someone suggested it to me and it made sense. I am not very good at saving money and Refresh Financial helped me. I have dealt with them for years now and never had a problem. The customer service is excellent and fast.”

    – Chris C

    Refresh helped me regain credit following a nasty divorce, which left me with a very poor rating. They were able to remarkably help me go from a 480 to a 600 score, in just over a year. Thank you Refresh!”

    – Deb K

    I have watched my credit score jump since being with Refresh and I have already recommended it to friends and family. Thank you for helping me build my credit faster for my future and my children’s future :)”

    – Heather T

    At first I was skeptical because I wasn’t getting funds upfront and had to make payments when I really needed the money. I’ve been in the program a year now and have noticed my credit has improved drastically!”

    – Irene L

    I have been a client of Refresh Financial for approximately 3 years. Since being a client they have improved my credit immensely. Definitely recommend this company to anybody that needs help re-establishing credit.”

    – Jason I

    “I recommend this program to anyone having credit issues. At the end of the agreement, your money is refunded to you. There were times I found myself short on cash and Refresh, with permission, used a portion of my money to clear up my arrears.”

    – Margaret L

    “I would like to thank Refresh Financial for their professionalism, great customer service and for helping get back to a better financial situation. I have always been treated with the utmost respect.”

    – Martine B

    Refresh Financial is an amazing program to help people get back on their feet. I was rock bottom with nowhere to turn. My credit was beyond poor. I would recommend them to anyone. If I can do it surely anyone else can.”

    – Matthew S

    “Great company to deal with for rebuilding credit, very simple process to get started. Good service if you ever have questions.”

    – Mike L

    This business truly cares about its clients. The customer service is always quick to return calls or emails. Their online portal functions very well so as a customer you are always updated as you progress with your loan.

    – Phil J

    “Refresh Financial has made us more aware of how to take care of our financial situation and be more responsible, and making payments on time is rewarding in the end for credit. Thank You sincerely.”

    – Rocky M.

    “Refresh financial is great!!! They boosted my credit score, helped me save money and helped my husband and I buy our house;) I was not only a number to them, they stayed in touch and helped me out along the way. Answered all my questions and concerns.”

    – Sara B

    “Refresh Financial had been exceptionally good to me! I’ve just been out on medical leave and they have accommodated me with my payments without hesitation!! I was in a really bad spot with my credit and they have helped me to try and correct it!! Bravo!”

    – Shannon B

    This company has been nothing but fantastic. They have gone above and beyond to help me. This program has given me the relief and peace of mind I need. I would certainly go back to them and give them names of people who could use this.”

    – Shirley K

    The financial services products are excellent for new immigrants, low-income earners and small business owners. Loans, savings and credit building all in one solution is a perfect fit to help with financial goals and stability.”

    – Soraya H

    “After successfully going through a credit rebuilding loan, I was able to use my built-up equity to purchase a newer vehicle and I have since been approved through a financial institution for a loan.”

    – Tanya W

    “I made some poor credit choices when I turned 18 and have always had this lingering thought of how am I ever going to better my score. Since being with Refresh I have realized that I took the right step towards bettering my future.”

    – Taylor B

    “Thank you Refresh, and my relationship manager for giving me the tools for a better score with a secured card and two credit builder loans. I feel absolutely confident I’m on a better path to financial success. I am happy to be a long term client.”

    – Trevor P

    I’m so excited I’ve joined refresh! I’ve already seen a huge increase on my credit after the first month! The staff are a delight and make this so easy to understand. I strongly recommend Refresh Financial even if you have good credit this will give you a boost and you’re saving money with the reverse loan!”

    – Wayne B