It’s easy to get a little bit up in arms about the credit reporting bureaus when you think about how much impact your credit score has on your life. The fact of the matter is, however, the credit bureaus aren’t really the ones to blame for how good or bad your credit score is. Sure, they do the calculations that distill your credit history down into a three-digit number that creditors use to decide your creditworthiness, but they pull that information from your credit report. Your credit report is a combination of your actual financial behaviors along with what the creditors actually report to the credit bureaus.
You need to understand a little bit about how the system works. Creditors, such as those that hold your home loan, your car loan or your credit cards, report on a regular basis to the credit bureaus. Those credit bureaus consist of Equifax, Experian and TransUnion.
You also need to know that most credit card companies report to all three of these credit bureaus on a monthly basis. However, some of the credit card companies, especially those that offer subprime credit cards, only report to two of those credit bureaus.
How often a credit company reports and to which bureaus they report isn’t information that’s generally included in your statement information. However, you can contact your creditors and ask them how often they report and to whom.
The key is, if you want to improve your credit score, to know what goes into that score. You credit score is calculated using several factors, including:
- Your bill-paying history. How you pay your bills, and whether you miss payments, is the biggest factor in your credit score.
- Your debt ratio. Specifically, the ratio of your debt to your credit limit is a significant factor in your credit score.
- The age of your accounts. How long you’ve had your credit accounts matters, as well.
- Credit inquiries. When you apply for new credit, it negatively affects your overall credit score, so make sure you only do it when it’s necessary.
- The type of credit you have. Having less revolving credit, such as credit cards, is usually a good thing.