How often do credit scores update?
There are many factors affecting a person’s credit score, including the number of credit transactions each month, account balances, credit mix, and whether or not bills and debts are paid on time.
These financial activities are reported to the credit reporting agencies which keep the information to everyone’s credit report. Credit scoring companies, including FICO®, use the information in your credit report to determine your unique credit score.
Because credit is fluid, there is no fixed timeframe that credit scores update. However, in general, credit scores update every 30-45 days.
At Credit Union of Southern California (CU SoCal), we make checking your credit score easier.
Call 866.287.6225 today to schedule a no-obligation consultation and learn about our home equity lines of credit, auto loans, personal loans, checking and savings accounts, and other banking products. As a full-service financial institution, we look forward to helping you with all of your banking needs.
How often does a credit score update? Read on to learn more.
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When do credit scores update
According to the credit reporting agency TransUnion, credit reports are updated when lenders provide new information to the nationwide credit reporting agencies for your accounts. This usually happens once a month, or at least every 45 days.
The credit reporting agency Experian reminds us that not all lenders report information to the three nationwide CRAs — Equifax, TransUnion and Experian. It's up to each individual lender to decide when they will report information as well as which of the CRAs they report to, if any. Lenders that choose to report, typically do so monthly.
Why do credit scores change?
As we mentioned earlier, credit scores change over time as credit is used and bills are paid. Here is a closer look at the factors that affect why credit scores change.
Payments. As you make payments on your debt your credit score may fluctuate. If payments are made late and this is reported or goes to a debt collector your score will decrease. Payment history accounts for 35% of a FICO
® Score.
Changes in credit card balances. The total amount of debt carried affects your credit score.
Total outstanding debt. Amounts owed counts for 30% of your credit score. The more debt you have, the lower your credit score may go, especially if there are late payments. If you manage your credit well and pay on-time, then your score may not be affected.
New credit applications. New applications typically result in a small temporary decrease in score.
New loan or credit accounts opened. New credit counts toward 10% of a credit score, and a score will decrease when the creditor performs a credit check.
Bankruptcies. According to FICO
®, 7 years for completed Chapter 13 bankruptcies stay on a credit report for seven years and Chapter 7 bankruptcies stay on for 10 years.
Age of accounts. According to the credit scoring company FICO
®, although the length of your credit history only accounts for 15% of your FICO
® Score, it's still an important influence on lenders. It can impact the chances of whether or not you get a loan.
How your credit score is calculated
The most widely used credit scores are FICO® scores, which will range between 350 (high risk) and 850 (low risk). Lenders look at your credit score when you apply for a loan and use the risk factor to determine if you are credit worthy.
FICO uses five categories to calculate credit scores. The percentages in the parentheses below reflect how important each of the categories is in determining how your FICO Scores is calculated.
For some people, the importance of these categories can be different. For example, scores for people who have not been using credit long will be calculated differently than those with a longer credit history. As the information in your credit report changes, so does the evaluation of these factors in determining your FICO Scores.
Payment History (35%). This is the most important factor in a FICO Score. Payment history keeps track of whether you have been able to meet all of your payments on time when payments are due. This can take into consideration your payments on credit cards, mortgage, car loan, student loans, medical bills, and other personal debt. The more consistently you complete your payments, the higher your score will be.
Amounts Owed (30%). Having credit accounts and owing money on them doesn’t necessarily mean you are a high-risk borrower with a low FICO Score. However, if you are using a lot of your available credit, this may indicate that you are overextended—and banks can interpret this to mean that you are at a higher risk of defaulting. Amounts owed can also be referred to as “debt burden.”
Length of Credit History (15%). Your credit history length accounts for about 15% of your credit score. The longer you have had your credit accounts, like a credit card, the better a potential lender is to see how you manage debt. If you've successfully paid your credit card bill each month for several years, lenders will see you are a reliable borrower.
Credit Mix (10%). FICO Scores will consider your mix of credit cards, retail accounts, installment loans, finance company accounts and mortgage loans. Don't worry, it's not necessary to have one of each.
New credit (10%). Research shows that opening several credit accounts in a short amount of time represents a greater risk—especially for people who don't have a long credit history.
How to check your credit score for free
There are several ways to get your credit score. One of the best ways to check your credit score for free is by using
annualcreditreport.com.
Learn more about how to check your credit score.
How to obtain copies of your credit reports
By law, everyone is entitled to obtain free copies of their credit reports every 12 months from each of the three major consumer reporting companies (Equifax, Experian and TransUnion). You can request your credit reports for free from AnnualCreditReport.com.
The Consumer Financial Protection Bureau makes suggests these three ways that consumers can get their free reports:
Online: Visit
AnnualCreditReport.com
Phone: Call (877) 322-8228
Mail: Download and complete the Annual Credit Report Request form.
Mail the completed form to:
Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281
Is it possible to update your score faster?
In some cases, it is possible to have your credit score raised through a process known as "rapid rescoring." Rapid rescoring can only be requested by a creditor or lender (as part of a mortgage application process).
If you are trying to get approved for credit or a mortgage and are having trouble getting approved due to dings on your credit (such as an outstanding loan balance or an error is discovered on your credit report that is bring down your score), your lender will recommend you correct the error or pay off the debt. Next, the lender can request a rapid rescoring from the three major credit bureaus. A rapid rescore takes approximately three to seven business days before you’ll see an increase in your score.
Tracking your credit score at CU SoCal
At the CU SoCal, we believe you should have instant and free access to one of the most important numbers in your financial life – your credit score.
With
Credit Score and More, you can check your real time credit score and view your credit history instantly, through
Online and
Mobile Banking. There is no cost or credit card needed. This service is 100% free to all CU SoCal Members.
Why savvy consumers choose CU SoCal
For over 60 years CU SoCal has been providing financial services, including car loans, mortgages, Home Equity Loans, HELOCs, personal loans, credit cards, and other banking products, to those who live, work, worship, or attend school in Orange County, Los Angeles County, Riverside County, and San Bernardino County.
Please give us a call today at 866.287.6225 today to schedule a no-obligation loan consultation with a CU SoCal Member Services specialist.
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