What is a Credit Score & How to Improve It
It seems like we hear about credit scores constantly. But how much do you know about this number (3 numbers to be more accurate) that can have such a significant impact on our lives?
Why are there three different scores?
Each credit bureau can receive and report different credit information. For example, credit information may be given to one credit bureau, and not the others, or there may be a delay in processing credit information for one bureau and not the others. These factors and more can cause different scores.
What factors determine my score?
Payment history, amount of available credit, length of credit history, number of credit inquires, variety of credit accounts, and derogatory marks (accounts in collections, bankruptcy, foreclosure, liens, etc.) all influence your score.
Factors to Consider when Building Your Credit
Because lenders use the middle of the three scores, it's important to build scores will all three bureaus.
Review Your Current Report
Check your current scores and see what's being reported. Make sure it does not contain any errors or any incorrect information. If there are late payments incorrectly listed, dispute them with the credit bureau.
Make on-time Payments.
Whether you sign up for auto-payments, set payment reminders for yourself, or receive reminders from your various accounts, try to make all of your payments on time. If you miss a payment date by a few days, you’ll likely have to pay interest and late fees to your creditor, but don’t stress about your credit score; the credit bureaus don’t consider a payment late until it is 30 days past due.
Lower Your Debt and Increase Your Available Credit
FICO monitors how much credit you have available. Generally, FICO likes to see less than 33% of your available credit being used. For example, if you have a credit card with a $3,000 limit, FICO will grant high scores if you keep the running balance under $1,000. To improve your scores, work to lower your credit card balances to that 30% range and track your current balances each month. If possible, pay the full balance on your cards each month instead of the minimum payment.
Limit Applying for Credit
FICO tracks the number of times creditors check your scores. If you are constantly applying for credit cards and other loans, each application shows up as an inquiry on your credit report. Frequent inquiries in a short period of time indicate to credit bureaus that you may be in need of money and that increases your credit risk.
Keep Your Credit Accounts Active and Open
The amount of time you have an open line of credit will help your score. As long as you keep the account in good standing and use it at least once a year, it will help show a greater length of credit history on your credit report.
For more information, visit the Fico website. Please note: this information is offered in good will and does not guarantee an improved credit score.
Give Yourself Some Credit with RentTrack
We’ve teamed up with RentTrack so you can take building your credit to a whole new level.
RentTrack is a total credit service that reports to all three credit bureaus. Studies have shown an average credit score increase of 29 points in the first two months, and up to 132 points with two years of positive rent payments. With RentTrack, you can build your credit, just by paying rent on time.
In addition to helping you build your credit, RentTrack also gives you:
- Free credit score updates
- Credit monitoring and protection
- The ability to report up to two years of past rent payments so you can improve your scores quickly
As a Progress Residential® resident, you have special access to RentTrack services for just $6.95/month. Click here to learn more about RentTrack and sign up today.
Please note: Progress Residential® does not guarantee any improvement in credit scores. For questions about RentTrack, please click here.