As we move into 2017, many of us are thinking of ways we can improve our small businesses finances and personal finances. One tool to help you expand your capacity to access capital, grow your business, and achieve more financial success is to build up your credit score. Luckily, there are some easy-to-access tools to help you do this:
How does a credit score get calculated?
The short answer is, no one knows exactly how the credit bureaus calculate credit scores, preventing people from manipulating their scores. However, we do know that there are some tricks to help you improve your score. Check out our newsletters for credit tips from our Assistant Vice President – Loan Closing & Compliance, Kathia Kacic.
The major three credit bureaus (FICO, Experian, and Transunion) may have slight differences in their credit reports. If you apply for credit, ask your lender what source they use.
How do I know what my score is?
Under the Fair Credit Reporting Act, you have the right to access a copy of your credit report (click here to learn more about these rights). Many banks are offering credit information to their customers as part of their services.
Your bank: If you bank online, check to see with if there’s an option to check your credit report. If it’s not easy to see in your banking portal, try calling or visiting a branch to learn more.
Free resources: Sites like freecreditreport.com and Credit Karma offer access to information about your credit for free. You may notice differences in each of these resources and in your official credit report, because of the slight differences in what factors are included in the calculation.
How frequently should I check my score?
Opinions on this vary. Monthly may feel too frequently, but annually may mean you miss something. Try monitoring your credit at a frequency that feels achievable to you and adjust as needed. Knowing your score can help you make better long-term decisions about your finances and about your small business development.