Your credit score is a three-digit number that’s used as a quick method of determining your creditworthiness. You may have a slightly different credit score for each of the three major credit bureaus (TransUnion, Experian, and Equifax). Each score is based on the information reported to that bureau, and lenders aren’t required to report to all three bureaus. If your credit is less than perfect, when should you fix your credit score? The answer is as soon as you can.
Factors That Determine Your Credit Score
A combination of factors goes into calculating your credit score. The most important factor is your payment history, and potential lenders want to see a history of paying your bills on time. If a payment is more than 30 days late, it shows on your credit report and can stay there for up to seven years.
Another important factor is the amount owed, which considers the total debt you have and the percentage of available credit you’re using on credit cards and revolving lines of credit. It’s a good idea to try to keep the amount of available credit you’re using less than 30 percent whenever possible. Other factors considered include the length of your credit history, how much new credit you have, and your credit mix.
Improving Your Credit Score
If your credit score is over 700 or above, you have a good credit score. Some lenders consider a credit score between 670 and 739 to be a good score. Between 580 and 669 is considered fair, and lower than 580 is considered poor.
If you don’t have a good credit score, you should take steps to improve it as soon as possible. If you’re not in the habit of paying your bills promptly, set reminders in your phone or establish automatic payments to avoid accidentally missing a payment. The more recent missed payments are, the more impact they have on your credit score. If you bring accounts current and continue to pay on time, your score will start to improve
Pay down your outstanding debt and avoid borrowing more money than you need. To improve your credit utilization ratio, consider consolidating credit card debt with a personal loan. Requesting a credit limit increase or opening a new credit card account can also improve your credit utilization ratio.
Make Sure Your Credit Reports Are Accurate
Consumers can get a free credit report each year from AnnualCreditReport.com. To be proactive about your credit score, review the information on your credit report and make sure there are no errors. It’s surprising how many people find errors on their credit reports. When you review your credit reports, make sure your personal information is correct and that the balance and payment status of your accounts is reporting correctly. Also, verify that there are no duplicate accounts showing.
If you find any errors, dispute them right away. Dovly is an AI credit engine that can help you track and fix your credit. We will work with the credit bureaus on your behalf to correct any misinformation. Get in touch with Dovly today.
