Financial transactions are one of the indispensable elements of our lives. Credit score is the most important factor in order to carry out our financial transactions in a healthy way and to make a good budgeting. Therefore, the credit score update is an issue that we need to monitor and manage frequently.
When we observe the credit points for a short period of time, we notice that there are continuous ups and downs. This is due to credit reports. Credit reports are updated for one month, during which time new information is added or some information is removed.
If your credit score is too low, it will take some time to improve. The process of improving your credit score is like a marathon, as like a long way to walked slow steps. If your credit score is good, an incorrect financial transaction will result in a bad credit score update.
Credit score update comes from credit report
The credit score is shaped according to the credit report.
Credit reports are documents that show how we paid or used the money we borrowed in the past. Credit reports show the limits, balances in our credit account, and are based on information indicating whether we have paid on time. It also includes information on how many times we apply for a new loan, such as collection accounts, to lower your credit score.
Credit reports are prepared and updated by three leading credit reference agencies (Equifax, Experian and TransUnion). You can get your credit reports free of charge from these 3 agencies, you can follow the information that leads to credit score update through these reports.
Most creditors regularly report to 3 credit reference agencies on a monthly basis. However, the times reported during the month vary according to each creditor and not all creditors have to report to all 3 credit reference bureaus. Some creditors can only report to one or two credit reference agencies. This is exactly why 3 credit reference institutions have different credit points. As creditors or lenders do not report to 3 credit reference institutions, your credit reports are different, and this is reflected in the credit score. Reports must be submitted for credit score update. Along with the update of the reports, credit score update takes place in the new calculation period.
What are the factors affecting the credit score update?
Factors affecting the credit score update are as follows;
- Which scoring company is used
The best known credit scoring system is FICO. However, although not as effective as FICO, VantageScore is another credit scoring system that we frequently encounter. Although the two credit scoring systems deal with similar issues, the calculation systems are different.
- Which credit reference agency you prefer
You should get credit score and credit report from all 3 credit reference institutions in order to get healthier results and to be able to intervene immediately in any negative situation.
- What was done to improve the score.
There are 5 main factors affecting the credit score, but all have a different degree of influence on the credit score. In order for the credit score update to be good and high, the impact rates of the factors affecting the credit score should be considered.