Some financial topics can be difficult to understand, but your score or credit score does not have to be. If you have credits such as credit cards or loans with any type of destination, you have a credit history, and therefore a report on your financial behavior and how you manage your money.
Your credit information is analyzed to calculate your credit score, a three-digit number that, along with your credit report, is used by lenders to decide whether or not to grant a certain credit.
What affects the credit score the most?
Your payment history is the most important aspect of your credit score, as it shows how you have managed your finances, including late payments. It is also key because it shows how long you have been managing your accounts and when the last payments on your financial obligations were made.
Do the types and number of credits affect the score?
Yes, the different types of credit you have (credit card, home loan, vehicle) as well as the number of credits, influence your score.
Information centers and credit denial
It is important to bear in mind that the two most important information centers in Colombia have different methods to calculate your score. The same user may have a score in one central and a very different one in the other. Not all entities work with the same credit information centers, so the information reported in your history, as well as your score, may vary from one center to another.
It is advisable that at least once a year you review the information reported in the two credit information centers, to make sure that the data recorded there is correct. We recommend that you purchase our continuous credit information monitoring service, which will allow you to discover any inconsistencies in your report or even potential fraud carried out with your identity.
What personal details do not affect my credit score?
Now that you have an idea of which aspects are taken into account when calculating your score, it is good to know which ones do not influence. Your score is a representation of how you manage your financial life, not a picture of you as an individual: things like age, ethnicity, religion and marital status are excluded from the calculation of your score. Your employer, your salary, and your occupation are not included in the equation either.
A credit bureau needs a history of how you’ve managed credit before it can calculate your score. Generally, six months of activity will provide enough information to generate a score. As your history increases, your score can increase or decrease depending on how you pay your bills over time.
Your credit score is a snapshot of how you manage your credit at a particular point in time. Paying your bills on time, keeping balances low, and not getting into too much debt are aspects that will help improve your credit profile, resulting in a higher score.
Before paying, ask yourself if you need to see your credit score. It could be interesting. But is it worth paying to see it?
