How Often Does Your Credit Score Update?
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What Is My Credit Score?
Do I Have One Credit Score?
Incomplete credit reports. When you submit a request for your credit score, the score you’ll receive is based on the information in your credit report at that reporting agency at that time. Most report to credit agencies on a monthly basis, but exactly when and to which agency—Experian, TransUnion, or Equifax—a lender chooses to report to can vary. Different reporting agencies can have different information at different times, resulting in different credit score results. And credit reporting agencies do not share information with each other. Different scoring methods. Credit scores are calculated using a scoring model that analyzes the factors and patterns in a credit report. There are several types of scoring models that analyze data differently, and credit reporting agencies don’t universally use the same one. FICO® and VantageScore® are two of the most widely used scoring models, and each has several versions that any reporting agency can choose to use. FICO even offers industry-specific models such as the FICO Auto Score or the FICO Bankcard score that can provide a credit score tailored to the type of credit you’re looking to obtain.
Which Credit Score Should I Use?
How Often Is a Credit Score Updated?
What Affects My Credit Score?
Payment history. Your ability to make payments on time factors into your credit score evaluation. Late or missed payments on things such as auto loans that appear on your credit report can pull down your credit score. Credit utilization. The amount of credit that you’re using compared with the amount of credit you have available to you is referred to as your credit utilization ratio. Generally speaking, borrowers with ratios of 30% or less are considered lower risk, ultimately earning higher credit scores. Maintaining higher spending ratios can hurt your credit score. Length of credit history. The age of your accounts matters. Seasoned borrowers who’ve maintained credit lines for a significant number of years generally receive higher marks than those who are still fairly new to managing and maintaining credit. Types of credit. Having a variety of credit in good standing is generally seen as a sign of fiscal responsibility. Installment credit, such as personal loans, have set end dates and specific monthly payment amounts. Revolving credit, such as credit cards, allow for repeat borrowing, have no end date, and monthly payment amounts can vary. Multiple credit applications. The occasional application for a new credit card or loan isn’t worrisome, but many applications at once can raise red flags. Multiple “hard inquiries” for credit can indicate financial trouble and cause a credit score drop. Then again, FICO and VantageScore count many hard inquiries of the same sort, for a mortgage or auto loan, for example, made during a window of time, 45 or 14 days, respectively, as one.
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