Buzz
Wondering how to raise your credit score? Awareness might be the simplest first step towards progress.
A new survey by Javelin Strategy & Research and credit bureau TransUnion revealed that over half of U.S. consumers check their credit score at least once a month. Here's an interesting insight: a significant number of individuals with subprime (low) credit scores who monitored their credit over the course of a year saw their scores rise. From an exclusive USA Today report on the findings:
Over one-third (34%) of subprime consumers who tracked their credit between March 2018 and March 2019 improved their credit scores, reaching a near-prime or higher tier. This figure dropped to just 18% for those who did not monitor their credit during the same time frame.
Checking your credit score, of course, doesn’t directly improve it—it simply gives you a rating that’s only truly useful if you're applying for new credit.
The emergence of free credit monitoring services and credit scores offered by financial institutions is still relatively new, creating a sense of excitement around it. People are eager to know where they stand. It’s basic human nature.
Do you remember when you could check your Uber rating, but only if you knew where to look? Everyone was curious to see their score. In a similar vein, there are entire online communities dedicated to discussing how to achieve a perfect credit score.
Despite the initial novelty, the availability of free credit scores seems to be benefiting people. Experian’s latest annual report on the state of credit revealed that millennials’ credit scores in 2020 were 25 points higher than in 2012. Additionally, the average age of Americans reaching a FICO score of 700 has dropped from 62 to 54 since Experian began tracking scores in 2012.
Your credit score isn’t an exact reflection of everything in your credit report, but it offers a quick overview and a general health check for those familiar with the typical score range.
It’s also convenient that there are numerous free ways to access your credit score now. Nearly 40% of respondents from TransUnion reported that they check their credit through multiple providers, with banks and credit unions being the most common sources. Although there are various methods for calculating credit scores, being able to view your score across different platforms gives you a clear sense of what lenders will see when they assess your score with their preferred method.
You don’t need to check your credit score every day—that would be excessive—but checking it regularly can help you stay on course if you’re actively working to improve it. It’s also a quick way to spot any issues if something’s wrong.
Are the individual components of your credit score more important than the overall number? Yes, because they give a better picture of your financial health. However, if you’re making an effort to manage your finances or reduce debt, having that score available can boost your confidence and provide motivation to keep going.
