Wondering how to increase your credit score? The first step to making an improvement might be simple awareness.
A new survey from Javelin Strategy & Research and credit bureau TransUnion found that more than half of U.S. consumers review their credit score at least monthly. If that doesn’t impress you, consider this nugget: A good chunk of people surveyed who had subprime (low) credit scores and monitored them over the course of a year were able to lift their scores. From USA Today’s exclusive on the report:
More than one-third of subprime consumers (34%) who monitored their credit from March 2018 to March 2019 boosted their credit score to a near prime or above credit risk tier. That percentage dropped nearly in half to 18% for those consumers who didn’t monitor their credit in the same period.
Of course, checking your credit score doesn’t actually do anything: It just gives you a grade that isn’t even really useful unless you’re applying for new credit.
But the rise of free credit monitoring sites and free scores provided by financial institutions is so recent that there’s still a sense of novelty to it. Everyone wants to know their status. It’s basic psychology.
Remember when you could find out what your Uber customer rating was, but only if you knew the right place to look? Everyone wanted to know their score. Similarly, there are entire forums dedicated to discussion about how to get a perfect credit score.
But the preponderance of free score sources seems to be helping people, beyond the novelty of it all. Credit Bureau Experian’s most recent annual report on the state of credit found that millennials in 2020 have credit scores that are 25 points higher than their scores in 2012. And the average age of Americans reaching a FICO score of 700 is the lowest it’s been since Experian began keeping score in 2012—it’s now 54 instead of 62.
Your credit score isn’t proof that everything is fine and dandy within your credit report, but it provides a quick glance and a general health check for people who are familiar with the normal range for your score.
It also helps that there are plenty of free ways to get your score now. Almost 40% of TransUnion’s respondents said they get their credit information from more than one provider, with banks and credit unions topping the list of sources. Despite the many formulations available for tallying credit scores, being able to see your score from several sources gives you a solid idea of what a lender will see when they access your score via their own method of choice.
You certainly don’t need to check your credit score daily—that’s just overkill—but regular checks of your score can help you stay on track if you’re making a concerted effort to improve it. And, of course, it’s a quick indicator if anything is amiss.
Are the components of your score more important than the total number? Yes, because they’re better indicators of the health of your finances. But if you’re making strides to manage your money better or reduce debt, having that score available can boost your confidence and give you a jolt of motivation.
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February 13, 2020 at 01:00AM
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If You Want to Improve Your Credit Score, Check It Regularly - Lifehacker Australia
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