1. How is my credit score calculated?
In addition to calculating credit scores themselves, the three major credit bureaus, Equifax, Experian, and TransUnion, provide detailed information about a consumer’s credit activity to other companies that calculate their own credit score. The two major companies providing credit scores are FICO® and VantageScore. Each uses a proprietary method to calculate their score.
VantageScore
VantageScore 4.0 considers the following when calculating your score (source):
Payment history (41%)
Repayment behavior, such whether you pay on time or have delinquencies.
Age of credit (20%)
How long you’ve been using credit.
Utilization (20%)
The ratio between available credit and used credit.
New credit (11%)
The number or recent accounts opened plus credit inquiries (hard inquiries).
Balance (6%)
Total amount of reported debt.
Available credit (2%) Amount of credit available.
Both FICO® Score and VantageScore range from 300 to 850. However, they divide the categories differently.
VantageScore categories
300 – 600: Subprime
601 – 660: Near prime
651 – 780: Prime
781 – 850: Superprime
2. How do I improve my credit score?
We’ll highlight several common ways that have been used to impact credit scores, while there are many resources with more information. You can take several steps to begin to improve your credit score, but be aware that there are no quick fixes. You may be able to see your score tick up soon after you start trying to improve it. However, credit reports are updated month by month and it may take several months or even years before your credit score is where you want it to be. Credit scores tend to be impacted more by the things you do wrong, vs the things you do right. So learning what not to do is often considered a good place to start.
Pay your bills on time. Late and delinquent payments make up much of what determines your credit score. It’s helpful to establish a good record of timely payments. Some people use autopay for their accounts to keep payments on time with less direct action from them.
Keep your credit utilization under 30%. For example, if you have $1000 in available credit, don’t spend more than $300. Even if you pay your bills on time, using more than 30% of your available credit can hurt your score. Keeping low balances on revolving accounts, such as credit cards, will help improve your score. Tip: Paying your balances off ahead of your due date could help reset your utilization for that billing cycle.
Avoid or limit opening new accounts, especially multiple accounts within a short period. When you apply for credit, the prospective lender makes a hard credit inquiry, which is reported to the bureaus. Lenders may interpret making multiple credit applications as you facing financial troubles and looking to increase debt as a way out.
Keep older accounts open. Length of credit history works for you. The longer you have an account open, the more stable you can look to the bureaus.
Consolidate your debts. Too many accounts may work against you. If possible reduce the number of accounts, but be careful of affecting credit utilization. Don’t max out an account by consolidating it.
Regularly check your credit. Improving your credit score is a project, Extra can help by providing you with a monitoring service in the application.
3. Why is my score in the Extra app different from others, like Credit Karma or other banking apps?
Each of the three credit bureaus (Equifax, Experian, and TransUnion) uses a different model to calculate a credit score and each gathers data independently.
The credit bureaus pull your information from many different sources (such as lenders, collections, court records) at different times, there will always be discrepancies at any particular time between the reports from each credit bureau.
The financial institutions and companies that provide your credit score use different methods. Some rely on FICO® Score and some rely on VantageScore. Even between those two companies, there are credit scores based on reports from one bureau, two bureaus, or all three bureaus. Extra is providing you with scores from Experian.
4. How do I dispute and correct inaccurate information in my credit report?
If you discover information on your credit report that you believe is inaccurate, you can take the following steps to dispute and hopefully correct the information.
Highlight the errors on your credit report
Gather supporting documents that show your side of the story; for example, receipts or bank records showing that you made a payment on time that has been recorded as late or delinquent.
File a dispute directly with each of the credit bureaus.
You can also submit your information directly to the reporting lender.
After you submit your claim, you may need to wait 30 to 45 days before it’s resolved and the corrected information appears on your credit report. Note however, that if the inquiry confirms that the information is accurate, the bureau or lender won’t change it.
If you still have questions after your claim is rejected and want to pursue your dispute further, you can file a complaint against a bureau or lender with the Consumer Financial Protection Bureau or with the Attorney General of your state.
5. Why do the reported dates differ between accounts? Does that mean my score isn’t up to date?
Lenders generally update their data on a monthly basis. However, the lenders may report data at various times during the month. The differences in reporting dates shouldn’t vary by more than 30 days. If you’re waiting for a specific update, such as corrected information from a dispute, remember that it can take up to 45 days for the updated information to appear on your credit report.
6. How secure is my credit data? Does anyone else, such as portal admins, have access to any of my information?
Your credit data is fully encrypted and secure. No one else should have access to your information.
7. How frequently is my overall credit score updated?
Your credit score is updated every 30 to 45 days.
8. Can I get my credit information sent to my email?
You can securely access your credit information online in the application. For security reasons, we won’t send your credit information by email.
9. If my spouse and I share lines of credit, mortgages, or loans, will I be able to access their information?
You and your spouse can see the information from all shared accounts, but having some shared accounts doesn’t allow you or them access information about any non-shared financial accounts.
10. How long do public records stay on my file?
Derogatory information can stay on your record for 7 – 10 years. It’s always good to review your records to ensure that the information is accurate. If you find something that you feel is inaccurate, take steps to dispute and correct it.
11. Can you provide me with a full background check so I can see more details?
You can get a comprehensive background check from several online service providers. We don’t provide a full background check, only a credit report and credit score.
12. Can I dispute an Inquiry for a loan I never actually got?
You can dispute it, however as part of your application, you would have provided signed permission for the lender to make a hard credit inquiry. The inquiry goes in your credit report whether you’re approved for the loan or not. It’s not likely that your dispute will prove successful unless the lender made an inquiry without your permission.
13. When will closed accounts come off my credit report?
Any accounts that were in good standing when you closed them will remain in your record for 10 years. Any negative information will remain for 7 years.