[Y]our credit score can technically change every day, depending upon a number of factors. First, it is important to understand what a credit score is and what it is not. A credit score is a number ranging from 300 to 850. The higher the score, the better your application appears to lenders. However, a credit score does not take into account other important factors that can prove or disprove financial stability. For example, a lender will probably care how long you have lived at the same residence or held the same job. But the information does not actually impact your credit score.
A number of factors can increase or decrease your credit score. Your credit card companies and personal loan holders usually report your payment history on a specific day each month. However, some companies update more often and others do so less often. There is really no law that mandates how quickly they report your information as long as they make an effort to keep the data fairly accurate.
So, if you made a large payment on a credit card account your score could go up in three days or three months. Time is the key to improving your credit score, whether you owe a lot of debt or have an assortment of unpaid collection accounts on your credit report.
Collection accounts means you did not pay a lender or utility provider as agreed. In most states, doctors and hospitals have the power to damage your credit rating if you did not pay them as expected. A collection account will weigh down your credit score for seven years. However, as each day passes the impact on your credit rating is lessened.
Other factors such as how often you apply for credit can decrease your score in as little as a day. If you apply for too many loans or other new accounts, this creates a red flag in the eyes of most lenders. True or not, a lot of credit applications can make you look financially desperate. So, if your mission is to increase your score then apply for credit as infrequently as possible.
A good way to boost your credit score quickly is to make a large payment on a credit card account. For example, if you have a $2,000 credit card with a $1,200 balance your credit rating will suffer. If you make payments that reduce the balance to about $750 or less your credit score will quickly increase. Again, the speed depends upon when your lender reports the payment to the credit bureaus.
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