If you were someone who was classified as a consumer with bad credit, then you have probably made the easy decision of changing that- by improving it. Unfortunately, improving or repairing your once downtrodden credit does not happen overnight.


Changing your credit score for the better takes time and dedication. Meaning, a single payment made on schedule, among a sea of late payments, will not have an instant, or significant, impact on your credit score.


However, that said, your credit score does change, quite regularly in fact. Whenever someone, be it a creditor, lender, or some other entity, requests to see your credit score, it will be calculated and updated then and there to reflect the information on your credit report.


Your Credit Score and How It’s Calculated

A credit score, or a consumer credit score, in particular, is, oftentimes, a three-digit numerical expression, ranging from 300 to 850, based on a level analysis of a consumer’s credit information. In simple terms, consumer credit scores are a metric used to judge and determine one’s creditworthiness.


In the world of crediting and lending, consumer credit scores are used to determine a prospective borrower’s ability and likelihood to pay back a loan or debt. Generally, the higher the credit score, the higher the chances a borrower will be able to fulfill their credit commitments.


But, how are they calculated? Well, there are numerous consumer credit scores, most notable FICO and VantageScore, but most, if not all, use the information on a consumer’s credit report to calculate it.


While the exact formula on how to calculate a credit score has never been fully disclosed, FICO scores, in particular, separate the information on a consumer credit report into five categories, with their own varying levels of importance and impact on credit score calculations.



  • Payment History (35%)
  • Credit Utilization (30%)
  • Age of Credit (15%)
  • Credit Mix (10%)
  • New Credit (10%)



Credit Reports and How Often They’re Updated

A credit report is a detailed breakdown of a consumer’s credit history compiled and prepared by a credit reporting bureau. In the United States, the credit reporting bureaus responsible for gathering and compiling the necessary information that makes up a credit report are Experian, Equifax, and TransUnion- also known as the three major credit reporting bureaus.


However, while the credit reporting bureaus are in charge of preparing consumer credit reports, the information that makes them up actually mostly comes from data furnishers. A data furnisher is an entity that reports your credit account’s activities to the credit reporting bureaus, which include banks, creditors, or service providers. 


Meaning, the information on your credit report is actually constantly being updated. As new credit information is received from the data furnishers, old credit information is removed or corrected, your credit report is updated fairly continuously.


Do understand, however, even with that said, some data furnishers, such as your lenders, only report your credit information about once a month, or once every billing cycle- which is about 30-45 days.


With this, depending on when your credit score is requested, some information on your credit report may not be reflected in your newly calculated credit score. Thus, credit score improvements do not happen overnight.


How Lenders Get Credit Scores

Whenever you apply for credit, such as a mortgage, auto loan, or credit card, your lender will request for your credit report from a credit reporting bureau. Creditors and lenders may also request that a credit score be calculated from them.


While some lenders do have their proprietary credit scoring system, oftentimes, credit score calculations are left to credit scoring companies, who use their own credit scoring models, such as FICO and VantageScore.


Each scoring model may weigh factors a little differently. For instance, while both FICO and VantageScore penalize late payments, VantageScore puts more emphasis on mortgage payments.


In addition, your credit score may also be different on what credit scoring model was used to calculate it. For example, FICO scores may be calculated by only considering a credit report from a single credit reporting bureau. Whereas, VantageScore uses credit reports from all three credit reporting bureaus.


The Bottom Line

Your credit score is calculated using the information in your credit report- which updates all the time. However, your credit score is only updated if an entity, such as yourself or a lender, requests for a calculation. Meaning, even if you have started to make smarter consumer behaviors, it may not be instantly reflected on your credit score.


But, what is important is you have started your journey on getting a better credit score. For those of you who have not, it may be time to get it fixed. Your credit score is an important financial tool. A bad credit score will deny you many opportunities, and cost you money- and no one likes getting costed money. Call us at 888-799-7267 to schedule a Free Credit Consultation.


Set up a Free Credit Consultation to start your credit repair journey (just fill-up & submit the form below):

Set Up a Free Credit Consultation


If you want to see more informative articles like this one, visit: