Your credit score is a three-digit numerical representation of your financial health. Banks and other lenders consider this value as part of loan and credit card applications, so it must be updated frequently.
The credit reporting agencies update your file — and by extension, your credit score — whenever they receive new information from lenders. This usually occurs monthly.
Read on to learn more about how credit scores are updated, how often this happens, and what the related process of rapid credit rescoring encompasses.
How often are credit scores updated?
Credit reports are updated when lenders provide new information to the nationwide credit reporting agencies for your accounts. The main credit bureaus are Experian, Equifax, and TransUnion. How long your credit score takes to update varies, but it usually happens between every 30 to 45 days. Ultimately, the behavior of every loan provider is different, and some may send in updates more frequently than others.
You may be surprised to know that you have multiple credit scores. There are three main factors that can cause score variation. They include the following:
One: Which scoring company was used. When it comes to calculations, FICO and VantageScore are the most popular credit scoring models. Moreover, five main factors influence score computation, and each model weighs them slightly differently.
Payment history and credit utilization account for 35 and 30 percent of your score, respectively. Usually the length of your credit history is 15 percent, credit diversity is 10 percent, and any new credit accounts you’ve opened make up the remaining 10 percent.
Two: Which credit bureau supplied the credit report information. Not every creditor relays information to all three bodies.
Three: What the score will be used for. Both FICO and VantageScore rank your score on a scale from 300 to 850. Other models, such as Experian’s model, start at 200 instead.
When do credit reports update?
Your scores may change when your file is updated. Credit bureaus regularly add to your report to ensure that all information pertaining to your current credit and credit history remains relevant.
Your credit score isn’t included on any weekly reports generated by the three bureaus, but is updated about once a month. Credit reports differ from credit score checks in that they describe details pertaining to your financial habits that help compose your credit score. Such details include:
One: Payments you've made. Credit bureaus consider if you’ve made timely or late payments, or if you’ve missed payments completely.
Two: Changes in your credit card balances. While most of us have many regular expenses such as car payments, rent, and utility bills, we may spend more at different times of year, like during the holidays. Having a higher credit utilization ratio, as a result, will impact your score. Pay attention to your credit limit to avoid getting flagged for strange behaviour.
Three: Your total outstanding debt.
Four: New credit applications you've made or new loans or credit accounts you've opened.
How often do creditors report bureaus?
Each creditor reports to the major bureaus according to their own schedule. Again, this usually occurs every 30–45 days.
The credit bureaus don’t typically update their reports simultaneously either, since the necessary information isn’t usually sent out all at once.
Your reported credit score for a given cycle is dependent on when your file is officially revised. The frequency with which you’re applying for or opening new accounts, your credit card balance fluctuation, and how you’re paying your bills will impact your score on a daily basis. The more changes in your financial activity, the more your report will require updating, which requires patience on the consumer’s end. Things like student loans or personal loans — not daily spending — or late and missed payments usually account for larger changes in credit scores.
What is rapid rescoring?
If you’re looking to gain approval for a source of credit, such as a mortgage or a new credit card, you may wish to do this. Rapid rescoring means that you won’t have to wait for the next round of routine updates, as it will be amended within a few days instead. This is a service that your credit lender requests on your behalf.
Some things you should consider before you submit a request for this are:
Tip #1: You aren’t able to request a rapid rescore on your own.
Tip #2: A lender must request one on your behalf, and there’s usually a fee for the service.
Tip #3: A rapid rescore can’t fix previous mistakes or make negative information disappear.
The bottom line
Your score is dynamic and changes alongside your financial goals. Your report is a reflection of your progress, your strengths, and the areas that may need some improvement.
Since you’re entitled to a free credit score report from any of the three credit bureaus once a year, take advantage of these services. That way, you’ll be able to stay abreast of your financial health. You can also obtain a free credit check from the Annual Credit Report website.
It can be challenging to wait for your credit score to be updated, but there is a process, and that process takes time. Keep practicing wise money management so that when you receive that report, it is to your satisfaction. Your card issuer should monitor your activity, but routinely checking all of your credit card statements and credit score can also protect you from fraudulent payments or, potentially, identity theft.
Equipping yourself with tools for wise money management is just as important as boosting your score itself. One such tool is Point Card.
Designed as a transparent, easy-to-use alternative payment card, Point empowers all cardmembers to exercise financial independence and spend their own money while also receiving exclusive benefits. This includes unlimited cash-back and bonus cash-back on subscriptions, food delivery, rideshare services, and coffee shop purchases.
Furthermore, all card users are protected by Point’s built-in safety measures that not only protect the wealth you’ve already generated but the money you’ll earn in the future. Fraud protection with zero liability, car rental and phone insurance, no international travel fees, and no interest rates are just a few of these safety measures.
And in applying for Point Card no credit check is required.
Made to spend.