So, exactly how often does your credit score change?
New information is coming into the credit bureaus all the time and your report is being updated.
It could even change minute-by-minute, and the credit bureau matters as well.
The long and short of it? Your credit score can change frequently but your credit report, which your score is based on, is unlikely to fluctuate that much.
There are a few important things to know when thinking about how often your credit score changes. Timing your credit appropriately can help you rebuild damaged credit or make large purchases more cost-effectively.
Here’s a look at a few things to consider when you’re thinking about how often your credit score changes.
More Important than Your Score? Your Report.
Credit reports offer a very detailed look into your ability to repay and your credit history. They give lenders a window into your financial life, how you view credit and how likely you are to repay a particular loan. This allows them to offer you a product that’s right for you.
It’s important to remember that not every company offering you credit is reporting to or pulling your credit. There is a common misconception that your rent is reported on your credit report. Generally, it is not, by default.
Additionally, not all lenders report to all of the credit bureaus. Thus, you may find that your TransUnion report is very different from Equifax or Experian. Generally, all of the loans in question will be present but the amounts and payment history may be substantially different.
There are also other companies and groups that calculate your score, like FICO or VantageScore. These groups apply a proprietary algorithm to your report and the score reported by the credit bureaus so they are not a very good gauge of your overall credit standing. They even produce scores for specific types of lenders, like auto or mortgage.
Looking to Improve?
If you’re asking how often your credit score changes because you’re looking for it to head in the upward direction, there are a few things you can do to help the process along. You may be pleasantly surprised at how quickly you can see results.
Know When Lenders Report
Most financial institutions that report to credit bureaus, called furnishers, report payment activity and loan size every 30 days, for the previous 30 days’ activities. Bureaus then work that data into your credit report and can produce an updated score.
Unfortunately, this isn’t always the case. Sometimes lenders can take up to 60 days to report different portions of your report. Some businesses even report quarterly.
Know Who Reports and Who Doesn’t.
Seems silly, but not every financial institution, lender and most especially, landlord, report to credit bureaus. If you’re working to rebuild your credit after a bankruptcy, or just want to ensure your good notes are reported, ensure that your rental payments are reported. There are a variety of companies that can help you do this if your landlord doesn’t report on their own.
Make On-Time Payments, More if Necessary
Making on-time payments can, quite obviously, help you improve your score. But consider making extra payments as well, either by including more than your required amount or by making two payments instead of one. Paying more than the minimum can really help your score quickly.
Small Fluctuations or Giant Swings
Because your score is recalculated often, generally at the time it’s pulled, you shouldn’t look at the minute swings in the score from day to day. Instead, ensure you’re looking at the long-term change over a month or more.
If you’ve taken some action to try to bump your score up, make sure your strategies are leading to an upward trend. Plotting out your score and recording the ups and downs can be helpful with this.
Additionally, you should be mindful of large spikes up or down, whether you initiated a credit inquiry or not. If your score suddenly bottoms out or takes a huge upturn, you should sort out why. Did you start shopping around for a loan? Was your information stolen and a loan opened in your name?
If you do notice a large swing, don’t fret. It is possible, particularly if you have entered into a delinquency or had a large change in your debt load, for example when purchasing a house.
Make sure you understand why the spike or swing occurred and if you are in delinquency, do your best to get right with the lender as soon as possible. Longer delinquencies are exponentially worse.
Why Does it Matter?
It’s important that you know when furnishers report your credit information to bureaus and when your score changes because new reports, either positive or negative, can affect your credit utilization ratio. Credit utilization is the amount of available credit you have as compared to the amount of credit to which you have access.
Paying down debt is undeniably good, especially if you have problems with repaying your bills. However, consistently carrying no debt at all is not always good. You want to be able to show lenders that you can effectively use your credit by making purchases and paying them off on time. This makes your score go up.
Be sure you’re checking your credit report often to see when your scores change. You can receive free credit reports each year and can get a good glimpse at your credit from many websites.