If you understand how important your credit score is to your financial health, you’ll likely want to know where your credit score stands at any given time. However, unless you have zero financial and credit activity, your credit score will likely fluctuate over time. The question is, how often does it change? At the same time, how often is your credit report updated?
Key Points
- Your credit score and credit report are typically updated every month or so.
- Any changes to your credit report can lead to a change in your credit score once your report is updated.
- You may find that your credit score differs among credit bureaus and other credit score providers.
- Different credit scoring models and lender reporting practices can result in different scores.
How And When Are Credit Scores And Reports Updated?
Normally, you can expect your credit scores and credit reports to be updated about once every 30 to 45 days. So, if you’re keeping tabs on your credit report and credit score, you may want to check it every month or two, especially if you’re taking steps to improve your credit health.
What Does The Credit Score Update Process Look Like?
As you use your credit accounts, your activity (such as making payments, taking out a loan, or paying off debt) gets recorded. Lenders report your account activity to the credit bureaus, typically once a month. This includes things such as your payment history, credit inquiries, and credit utilization.
This new information is used to update your credit reports. Your credit scores are then calculated based on the information in your credit reports. A change in your credit reports can thus cause your credit scores to change as well.
Why Do Credit Scores Fluctuate?
It’s completely normal for credit scores to change, but you might be wondering what makes your scores fluctuate. Here are a few factors that result in changes to your credit score and credit report:
When New Information Is Reported To The Credit Bureaus
When the two credit bureaus receive new credit information, they will update your credit reports accordingly. This can make your credit scores fluctuate. Some of the information reported to the bureaus that may affect your credit includes the following:
- When you open a new account (ie. credit card, personal loan, car loan, etc.)
- When you close an old account
- When you pay down debt
- When you make a payment on an account (or miss making a payment)
If Your Credit Card Balances Fluctuate
How much credit you use compared to your available limit may also cause your credit scores to fluctuate. If your credit card balance changes on a monthly basis, you may see a change in your scores because of this. This is known as your credit utilization ratio.
The Scoring Model Used
The credit bureaus, lenders and other credit score providers each have their own algorithm for calculating your credit scores. So depending on who you check your credit score with, your credit score will likely be different with each.
Information Expiring
The effect that certain information has on your credit scores can diminish as time passes. This means that your credit scores may fluctuate because a late payment or account in collections no longer carries as much weight in the calculation of your scores.
Similarly, negative information on your credit report doesn’t stay there forever. At some point, they’ll fall off your credit report. When that happens, your credit report will be updated accordingly, which can affect your credit score.
How Can I Improve My Credit Score?
If you notice that your credit score is a little on the lower end after checking your score or credit report, you should take steps to improve it. Here are some things you can do to give your credit score a boost:
- Pay Bills On Time: Your payment history holds the most weight when it comes to credit score calculations. So, be sure that all your bills are paid on time every billing cycle.
- Reduce Your Debt: Paying off your debt or reducing your credit card balances can help keep your credit utilization ratio under 30%.
- Increase Your Credit Limits: Request a higher credit limit on your credit cards to help lower your credit utilization ratio.
- Reduce The Number Of Loan Applications: Every time you apply for new credit, a hard inquiry will be noted on your credit report, which will affect your credit score slightly. Only apply for new credit when necessary.
- Keep Old Accounts Open: Even if you’re not using older accounts, keep them open to help maintain a longer credit history, which can have a positive impact on your score.
- Monitor Your Credit Report: Check your report regularly for mistakes and dispute any that you find.
- Diversify Your Credit Types: Having a mix of different credit accounts (ie. car loans, credit cards, and mortgages) can increase your credit score.
Why Do Canadians Want To Know How Often Their Credit Report And Scores Are Updated?
There are several reasons why Canadians want to know how often their credit report and scores are updated, including the following:
Track Progress: Keeping tabs on any changes to your credit score and credit report lets you see the effect of your financial habits and any actions you’ve taken to improve your credit profile.
Spot Errors: Regular updates to your credit report help you identify and dispute errors promptly, ensuring your credit profile is accurate. Mistakes can pull your score down unfairly, so catching them and having them removed can have a positive impact on your credit score.
Stay Informed: Monitoring your credit report can alert you to potential fraudulent activities or identity theft quickly. If that’s the case, you can take immediate action before the problem becomes more significant.
Bottom Line
Credit scores fluctuate with the information reported on your credit report. However, the degree by which it changes depends heavily on the credit scoring model being used, the type of information being reported, and when such data is reported. While every update may not change your credit scores, it’s still important to keep tabs on your credit report to ensure the information being reported is accurate.
