Credit scores are generated using information from your credit report. Your credit score will change as the information in your credit report changes. Payment updates, new accounts, and inquiries are a few things that could cause your score to change. You will find that your credit score might vary from lender to lender. This is because different lenders might use different credit bureaus and scoring models.
What determines a credit score?
Some of the information in your credit report that affects your score includes your payment history, total debt, recent inquiries, and the number, type, and age of accounts.
Why do Lenders use credit scores?
Credit scores help lenders assess risk more fairly because they are consistent and objective. Consumers also benefit from this method. No matter who you are, your credit score only reflects your likelihood to repay debt responsibly.
What are credit score key factors?
Score factors drive your score and indicate what elements of your credit report affected your score the most. Your total debt, types of accounts, number of late payments and age of accounts all will affect your credit score. Improving these key factors will help you improve your credit score.
How can I see my credit report?
Request a free credit report to review your credit accounts. The federal Fair and Accurate Credit Transactions Act (FACT Act) requires each of the three consumer reporting agencies to provide a free copy of your credit report once every 12 months. Visit www.AnnualCreditReport.com or call 877-322-8228 to retrieve your free reports.
How can I improve my credit score?
Credit scores represent payment patterns over time. Recent information tends weigh more heavily. In general, a score may improve, if you:
- Pay your bills on time
- Keep balances low on credit cards
- Apply for and open new credit accounts only as needed
- Pay off debt rather than moving it around
If you have negative information on your credit report, you may want to pay your bills and wait. Time will also help you improve your credit score.