Just about every time your credit is reviewed by an authorized party, they are looking at more than just your credit report. In addition to your credit history, which breaks down each of your past and present credit relationships, they may also be looking at your credit score to evaluate your credit health.
A credit score is a number that is generated through the use of statistical models using elements from your credit report. Your score, which is a fluid number, is not physically a part of your credit report; it is calculated at the time that a lender requests your credit report.
Chances are that you have already viewed your score and perhaps even seen it change over time. Because scores and scoring education have only recently become available to consumers, freecreditscore.com's scoring tools may raise questions and we're offering some answers to frequently asked questions we've received on this topic. Keep in mind that there are many credit scores in use by lenders today, but by consistently monitoring the same score like you see on freecreditscore.com, you'll have a good understanding of how scores change and are influenced by your credit behavior.
Your score can fluctuate based on when your creditors send us their information. Perhaps your balance increased on one or two of your credit cards or the age of your credit file has changed. Aging (how long you have had credit) indicates stability. A longer credit history will give you a higher score.
Over time, these fluctuations will "balance" themselves out so most likely if you have not changed your behavior the score will be fairly steady month to month. Although you can view your updated score daily, checking it on a monthly basis should be sufficient for tracking purposes.
There is no one thing that will always improve your score. In general, there are several things you can do to increase or maintain your score.
- Pay your bills on time - This is the single most important factor tied to having a good score.
- Establish a credit history - Having a few debts is good, it shows that you can responsibly pay for items. Keeping those accounts open for many years also helps 'age' your report. Having an established credit history for 5 years is better than only having credit for 5 months.
- Don't take on too much debt - The more debt you owe the higher risk you are to future creditors. Don't spread yourself too thin.