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I have scheduled April as a dedicated month to check out my credit score. Since we are permitted by law to know the free credit report from the three credit reporting agencies that gives us the opportunity to know one report for every four months.

   Here is the schedule that I recommend for my friends

  • April – everyone thinks about the money since it is the deadline for tax
  • August – four months after April
  • December – end of the year

     Whenever I look for credit report, two main things strike my mind. That’s errors and areas of improvement.

    Errors in the credit report gives pain the future. So you have to check your entire report. If any inconsistency occurs you have to report to the agency. The instructions are given in the back of the report to remove the faults.

   You have to check whether the areas in the report can be improved or not. This helps you to increase the credit score.

Credit score falls into two main categories – FICO and FAKO

       FICO measures the score based on the three reports using the algorithm called Fair Isaac Corporation’s algorithm. FAKO score is measured by an algorithm of TransUnion’s design.

   5 important aspects to improve the credit score are listed below.

  • Credit used
  • Credit history length
  • Debt credit ratio
  • Payment history
  • Recent inquiries

      Financial organization use these scores to measure the potential risk by lending money to borrowers and to secure the loss.