4 Quick Tips on Scores

If you get your credit scores online, you’ll notice they vary greatly, because each company has their own scoring formula. Similarly, even the Credit Reporting Agencies (CRAs) have created their own formula for their online credit scores (known as the “Vantage Score” ).

Each of your creditors report to the CRAs, but only once per month. This usually happens on the last day of the account billing cycle. So, because each of your creditors most likely report on different days of the month, your credit report and credit scores change daily. Hence, your report doesn’t reflect “real time” data.

Auto and homeowner insurance companies calculate a “grade” (A to D) instead of a score. They calculate it by combining your credit report data with other financial data (e.g. income) you provide from the application process. Although other financial information is factored into the grade, your credit report data carries the most weight.

Don’t be confused by numerous scores from different credit card companies. Each credit card company uses their own formula to calculate your score when evaluating your application (Acquisition Score). They also use another formula to determine whether to increase or decrease your credit limit (Usage Score).