How to Calculate My Credit Score: Key Knowledge You Need To Win

how to calculate my credit score

Wondering How to Calculate My Credit Score?

With all of the recent financial hype focused on credit scoring have you too wondered how to calculate my credit score? Knowing how to manage your credit score and the elements that impact it isn’t exactly common sense.

There are many factors that affect credit, from big debts you incur and pay over a long time to payments you’re late on that pile-up. Not to mention, there are plenty of ways to leverage your credit if you’re unable to pay off debt.

But, making the most of your credit begins with knowing where it stands in the first place! That’s why many people wonder things like “how to person climbing credit report check boxes

calculate my credit score”, or “why does having good credit matter so much.”

The more you educate yourself on your credit score and general credit management practices, the better off you’ll be. Below, we’ll explain how to check your credit score free and explore ways to use good credit and improve bad credit.

“How to Calculate My Credit Score” Made Simple

Checking and managing your credit nowadays is actually much easier than it used to be. Many sites offer easy to use tools like credit score improvement calculators to gauge how your FICO score is performing.

A few years back, people had to contact credit reporting agencies directly to get the answers they were looking for. Today you can find many free credit score improvement simulators online.

Most online banking systems have the option for you to check your credit score in-app with credit score simulator software. They’ve taken the seemingly complex issue of “how to calculate my credit score”, and made it simple.

man calculating his credit score online

All you have to do is log in to your bank’s app. Then find the option that says something like “check your credit score”, “FICO credit score”, or “manage your credit.”

If for whatever reason this option isn’t accessible to you, there are other ways to find the personal credit information you’re looking for with a credit score calculator.

Different Places to Check Your Credit

The three major credit reporting agencies are Equifax, Experian, and TransUnion. They are all reachable through AnnualCreditReport.com – a well-known free credit report tool used by savvy credit users. What most people don’t realize though, is that you should only use this system once a year (for each of the three agencies).

Checking your credit too much may actually harm your credit score.

But, once a year is enough to see where your credit stands and what you can do with it, either to improve your score or leverage it. As you’re going through each of the reports provided, make note of credit activity that may not be yours.

It is possible that agencies and reporting systems have made a mistake which affects your personal credit. In such cases, you can file a dispute against the agencies to fix the matter, and you can request a follow-up report to double-check the details, too.

Once everything that is related to your credit is actually debts you’ve incurred, it’s time to get to work. Debt isn’t necessarily a bad thing when you know how to make use of it and maintain good credit. Not to mention, if you have bad credit now, there’s no reason you can’t have good credit in the future if you work to build it back up.

Making Use of Good Credit

Most people don’t concern themselves with using their credit on a day to day basis.

Normal credit behaviors may be swiping your card when you need gas or purchasing concert tickets last-minute. Maybe you only use your credit card for absolute emergencies in order to keep payments down.

But, then there are times when you really need credit – like to get a business or personal loan, an approval for a car, or a manageable mortgage payment on a new home. These are big payments that good credit can help you access with ease.

person choosing good card versus bad card

Having good credit means you’re more likely to get approved for such expenses above, and more. Plus, as lenders are looking over your score, they’re more likely to trust that you’ll make payments on time. This can lower your interest rate, which keeps the total amount you owe as low as it can be.

On the flip side, having bad credit runs the risk of various financial applications not getting approved at all. Or, you may get approved with a more hefty interest than you would have liked.

How to Improve Bad Credit

Some people don’t even realize how bad their credit is until they go to buy something (like a new car or a home), and their credit gets denied. When you educate yourself on things like “how to calculate my credit score”, and more importantly, “how to improve my bad credit”, you’re less likely to be in such a situation.

Raising your credit score is not a quick fix. It doesn’t happen overnight, and there is not one definitive answer that improves all kinds of bad credit.

However, there are a few good credit behaviors practice and improve your score.

First is to catch up on missed payments.

Make it a point to save as much money as you can and keep up with future reoccurring payments. This may take some financial sacrifices or require you to pick up an extra job. But, it will be worth it as you watch your credit score rise.

If you get so good at saving that you have room in your budget to pay more than what you owe monthly, do it. To make managing monthly payments easier, consider consolidating your debt. This puts all of the things you owe in one place, making it significantly easier to track your payments.

Consolidating your debt takes you from keeping up with different days of the month and amounts due to one monthly payment that you pay to cover all of your expenses. There are many services to help you understand the concept of and to achieve debt consolidation.

man reaching into pocket to make payment

Other good practices for bad credit include:

  • applying for new credit only as needed
  • managing credit cards and small credit accounts responsibly
  • contacting a credit counselor or support service

Some of the ways to fix bad credit are actually pretty simple. Others are a bit more extreme, but may be worth it if your credit is in a particularly bad state.

More Credit Score Insights and Advice

Learning how to manage credit isn’t a class that you take in high school, or even in college. It’s something most people learn through trial and error – which can result in a pretty good or a really bad outcome.

That’s why it’s so important to investigate subjects like “how to calculate my credit score” and “how to make use of my credit.”

To have a little more control over your credit, you’ve got to start with the basic fundamentals of how credit works. Click here for further credit score knowledge.

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