Your credit score can change whenever new information gets added to your major credit reports. That can happen at any time, but it usually coincides with the statement dates of your loans and lines of credit, which is when lenders typically report account information to the credit bureaus. Your credit score will change if you apply for a new loan or line of credit, too.
“Think of your credit score as a moving target,” Equifax recommends. “It is always calculated based on the most recent and up-to-date credit information available, so it could change every day as lenders, collection agencies, and public records report new data that is then listed in your credit report.”
Just because your credit score changes, however, does not necessarily mean you’ll see the update right away. That depends on where you look. WalletHub is the first site to offer free credit scores (and reports) that are updated on a daily basis. So any new information added to your credit report today will be reflected in the credit score you see on WalletHub tomorrow. In contrast, all of the other free-credit-score sites update their scores on a monthly, or maybe even weekly, basis at best. So they might not show your actual current credit score for days.
In addition to promoting the misconception that credit scores update infrequently, the periodic updates provided by those other credit-score sites could cost you money if relied upon exclusively. There are a few ways this can happen:
- False Impression Of Approval Odds – Just like you might not be able to fit into a pair of pants that fit comfortably last year or maybe even last month, an old credit score tells you little about your current chances of qualifying for a particular credit card offer or a given loan rate. It all depends on healthy credit consumption and payment habits in the meantime.
Overdoing things can tip the scales against you. Not only is getting turned down for a financial product generally bad for your credit standing, but it also means you’ve wasted a bunch of valuable time and effort. You still will be in need of the financial product you were seeking, and your failed initial attempt might just make the task a bit harder. After all, it’s common for credit scores to dip after applying for a credit card or loan.
- Misdiagnosed Performance Issues – Imagine that you’re watching your weight and checking it once a month. Can you see the inherent problems in that frequency? The results would be disparate points in a sea of time, with important context lost in the unrecorded gaps. For example, you might not realize that you’re cheating yourself by fasting before each month’s weigh-in.
The point is that the more data you have, the less likely you are to draw false conclusions about the activity you’re tracking. Mistaken takeaways can lead to the wrong reactions, perhaps compounding the real issue at hand. That’s true of both dieting and credit improvement. You simply learn more by watching more closely.
- Missed Signs Of Fraud – Fraud indicators are among the most important information that can be overlooked when you check your credit score only in between long intervals. Each day that passes can further obscure the signs, such as a temporary drop in your rating, so that by the time you revisit things, what might have previously stood out like a sore thumb no longer draws your attention.
In other words, what you don’t know about your credit score can certainly cost you money.