The Well

Rachel Surman | Blog

Data Says Checking Your Credit Score May Help You Improve It

November 8, 2018

A new study from Borrowell found a connection between checking your credit score and improving it. This is how you can improve your credit score.

The study found that our most engaged members increased their credit score by an average of 18 points over time! But it also found a positive relationship between checking your score and good credit behaviour in general. So, if you want to improve your credit score – you can start by checking it.

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How did we find this connection?

Borrowell members receive their free Equifax credit score and Equifax credit report from Borrowell each month. To measure member engagement, we looked at the difference between a member’s first score when they started using our free credit monitoring service and their most recent score. Engaged members improved their score by an average of 18 points.

When we restricted the sample of members to those who had credit scores below the median, we found the most engaged members increased their scores by 30 points.

But what’s even more exciting is we found members who check their credit score actually have fewer delinquencies, collections, and lower credit utilization ratios.

Two ways to improve your credit score

Pay your bills on time

Payment history makes up 35% of your credit score. This is why making on-time payments is very important. In the study, we found that checking your credit score often was related to lower rates of delinquencies and late payments over time. 

Use less credit 

Credit utilization makes up 30% of your credit score. Your credit utilization ratio is the amount of credit you’ve used out of the total amount available to you.

You can calculate your own ratio by adding up all of the credit you’ve used and dividing it by your total credit limit. Banks and lenders like to see this utilization ratio below 30%. According to the study, members who improved their credit scores over time have learned to manage their credit utilization.

So if you’re ready to start improving your credit score, it’s time to start monitoring it! Checking your credit score is the first step to understanding your credit report and improving it. 

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