A low credit score can be caused by several factors. The way they rate your credit used to be as simple as ‘have you made any late payments or not’. Now they go much deeper.
Examples of what affects credit score
Length of credit history
Number of revolving accounts versus installment accounts
Insufficient length of credit history
Proportion of revolving balances to revolving credit limits is too high
Too many inquiries in the last 12 months
Too many accounts recently opened
Balances on accounts too high
Accounts not paid as agreed
Number of accounts delinquent is high
Past due or collected account
Too many accounts with balances
Too many accounts
This is just a very short list of all the different things that are now looked at. If you have a low credit score you cannot fix your credit overnight. It could take as little as a few months or quarters to get your score up to a better level that allows you to cross the minimum credit score limits, or to get better interest rates. But if your credit score is in really bad shape it could take a year, or multiple years, to repair your credit and substantially raise your credit score. Banks want to see that you have your act together and can maintain your credit score for the long term, not just for a few weeks or months, which is just long enough to apply for a loan application and get a mortgage. They want to see you have raised your credit score, and can maintain it there, for the long haul.