How Often Does a Credit Score Change?
Understand the dynamic nature of your credit score, learning when and why it changes based on financial activity.
A credit score is a numerical representation of an individual’s creditworthiness, offering lenders a quick assessment of risk. Scores typically range from 300 to 850, with higher scores indicating lower risk. This score is not fixed, but a dynamic snapshot of financial behavior, reflecting ongoing credit activities and obligations.
How Credit Scores Are Updated
Credit scores do not change on a predetermined schedule, but respond to new financial information. Creditors routinely report account activity to the three major credit bureaus: Equifax, Experian, and TransUnion. This reporting typically occurs monthly, often coinciding with a customer’s billing cycle. A credit score is recalculated when new data becomes available. The precise timing of these updates varies, as each creditor sets its own reporting schedule, leading to fluctuations in an individual’s score.
Events That Influence Your Credit Score
Financial activities cause credit scores to change by impacting the underlying data. Making payments on time consistently helps improve scores, while late payments, especially those 30 days or more past due, can significantly harm them. A single late payment can remain on a credit report for up to seven years.
Credit utilization, the amount of credit used compared to total available credit, is another influential factor. Maintaining a low utilization rate, ideally below 30%, is beneficial. Opening new credit accounts can temporarily lower a score due to a hard inquiry and a reduction in the average age of accounts.
The length of credit history also plays a role; a longer history correlates with higher scores. Having a mix of different credit types, such as installment loans and revolving credit, can also positively influence a score. Conversely, severe negative events like bankruptcies or foreclosures can cause substantial and lasting damage.
Credit Reports and Scoring Models
Credit reports serve as the foundational data source for credit scores. These comprehensive records, compiled by credit bureaus, detail an individual’s credit accounts, payment history, and public records. Creditors generally update these reports with new information at least once a month. Different credit scoring models, such as FICO and VantageScore, process this data using proprietary algorithms. While both models assess credit risk and use a similar score range (300-850), they weigh factors differently. This can result in slightly different scores for the same individual based on the model used. These variations reflect different interpretations of the data, and the presence of multiple scores is normal as lenders utilize various models.
Checking Your Credit Score
Given that credit scores change with new reported activity, it is not necessary to check them daily. Consumers are legally entitled to a free copy of their credit report from each of the three major credit bureaus—Equifax, Experian, and TransUnion—once every 12 months. These reports can be accessed through AnnualCreditReport.com, the only authorized website for this purpose.
Many banks and credit card companies also provide free access to credit scores, often a FICO or VantageScore, through their online banking platforms or mobile applications. While credit monitoring services offer more frequent updates, these often involve a subscription fee. Reviewing credit reports and scores periodically, such as quarterly or semi-annually, is sufficient for monitoring and identifying inaccuracies.