Credit score has to be the most important piece of information found on your credit report. It is also the first thing credit card companies and loan lenders look at when deciding whether they should do business with you or not.
This makes us wonder if there is any way in which we can known how to calculate credit score ourselves.
Surprisingly, it is super easy!
Banks use a pre-defined formula in order to calculate credit score and if you have all the data, you can do it on your own as well.
How To Calculate Credit Score Fast:
Credit score calculation takes into account a number of different factors. Some of these matter more than the others and therefore have more weightage in the overall calculation.
The most important factor is that of timely payment. This weighs 35% in the total calculation. Timely payments means that you should never cross the due date when paying the bills. The more you keep this in mind, better your score will be.
The next important criterion is debt. It is never a good practice to carry pending payments or incur loans on the card. This accounts up to 30% of the calculation.The amount you owe also include how much you have crossed the credit limit. Therefore, we always suggest that users should keep their credit utilization ratio below 30% if they wish to see a fast boost in their score.
The length of the credit history also carries 15% of the weightage. This means that the longer an account has been opened, the better. Opening and closing of many accounts can have a serious negative impact on your score.
There are two reasons behind this. First of all, it would mean your credit history will not be long and stable. Secondly, applying for multiple accounts would mean getting a hard inquiry over and over again. A hard inquiry has a temporary yet an evident impact on your FICO credit score.
The other two important factors are types of accounts and recent credit activity. Both of these cater to the remaining 20% of the score.
Can The Calculation Help You Improve Your Score?
Keeping an eye on your credit score standing and how your score is being affected by your habits can definitely help you make an improvement. In my opinion if you are looking to improve credit score. Then Getmyoffer Platinum Cards is the best option for you, cause it has capacity to suit low to high credit score holders.
For example, this check would let you identify your trouble areas and see which is the mistake you are making that is pulling down your score.
The best practice is to start by looking at the factors that carry the most weightage such as timely payments and debts. Since these two factors account for more than 50% of the total score, a good spending habit can sometimes be more than enough to fix a broken credit report.
Furthermore, checking your score and report would let you see if any error has been made in the calculation. Credit report is assembled and managed by credit bureaus. We are all just humans! There are fair chances that, by mistake, a debt has remained on your report even after you have cleared it.
Most instruments for overseeing far off workers track console exercises and applications utilized. Sometimes, that might be required or be adequate for tracking work from home representatives. Be that as it may, it’s not the best practice for most organizations. You are in an ideal situation estimating yield, not information or exercises.
For instance, in the event that you are dealing with a group of distant designers, you are in an ideal situation tracking yield (highlights finished/bugs fixed) than tracking console exercises. In the event that you are dealing with a group of blog scholars, track the number and nature of websites, not how long authors spend on Facebook or Twitter.
This would pull down your score without you knowing the actual reason. If you are keen enough to check the report once in a while, such errors can be disputed and thus fixed.
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We hope this guide would help you understand your credit score better. We are looking forward to hearing from you and how you are doing with your financial standing, paying tickets & more. If you think we have missed out on anything important, lets us know in the comment section below. Best of Luck!