You’re probably aware of how important your credit score is when applying for a loan or line of credit. But what do you know beyond that? Learn what your credit score means, how you can improve it, why your credit score may differ between sources, and about a helpful tool that helps you monitor and manage your credit score.
Your credit score represents your credit risk or how likely you are to pay your debts on time. All of the biggest consumer credit scoring companies use a credit score scale of 300 to 850. In general, the higher your score, the less of a risk you are to lenders, which is an incentive for you to raise your credit score as much as possible. However, every lender calculates credit scores differently, meaning there are no hard-set rules for what makes a “good” or “bad” score.
To improve your credit score, you should first know the considering factors in the calculation. Your credit score is derived from five factors: your payment history, how much of your credit you use, the length of your credit history, your mix of credit in use, and the number of new accounts you’ve opened. With that in mind, here are a few tips to help improve your score:
You may notice your credit score is different, depending on where you view it. This is because different lenders and businesses get your credit score from one of several credit bureaus. Each bureau uses a different credit scoring model and iteration of that model when calculating your score. To get a better idea of how lenders may perceive your score, you can request your credit report and score straight from all three major credit bureaus (Equifax, Experian, and TransUnion) and compare them.
Whether you’re maintaining or building new or existing credit, monitoring your credit score is essential at any stage. By using My Credit Score powered by SavvyMoney®, you can stay on top of your credit score with daily updates, full credit reports, and more. Plus, you’ll have access to custom offers on new or refinanced loans through Magnifi Financial, which can help boost your credit score or save you money. Learn more about this free service at https://mymagnifi.org/online/my-credit-score.html.