Although most people respect and even fear the Credit Bureau, the reality is very different from what we think or what the collectors have led us to believe. We must know that in addition to keeping control that indicates how many debts you have and how punctual your payments are, points are also accumulated in the Credit Bureau that make up our Score (Inside the page, you find it as My Score ).
And those My Score points, how do they accumulate? Is it enough to pay all my debts on time, or is there another factor affecting my score?
Very few people know how the points that define your Credit Bureau Score are.
Within your credit bureau history, there are two essential things that we must take into account when maintaining a good record with points in the credit bureau that allow us to access new and improved credits.
One of the points in the Credit Bureau that you must take care of to have a good history is to pay all your credits on time and keep “green check marks” in all your accounts and no yellow exclamation mark or red cross.
The second important point to have a good history and access more and better credits is having the Credit Bureau issues that allow whoever consults your account to see in a single pass how good a payer you are.
And the fastest way to know the punctuality of each person’s payment is by verifying the points they have accumulated in My Score since it is the summary of your Credit history indicated with a single three-digit number.
The number of points you have in the credit bureau serves as a measure of your payment behavior; it is generated month by month and is reflected in a rating that goes on a scale from 449 points and reaches a maximum of 775 points.
We said that the My Score number is three figures and indicates how punctual you are in paying your debts, but also how indebted you are and how often you look for new credits; It is a complement to your special report from the Credit Bureau, in addition to giving you a reference of how you are compared to the rest of the population.
The higher the number in My Score, the better history you will have and the easier it will be for them to give you new credits.
In My Score, in addition to indicating the number of points in the Credit Bureau, it is also shown in which group or percentage of punctual payment people you are.
In the example of the image on the right, we can see that the person has 717 points in the Credit Bureau and is in the 20% of people with the best credit history.
In other words, it has more points than 80% of the country, which represents a very long history that only 20% of the country shares.
Although it also represents it indicated graphically with colors that make it easier to understand.
Now, what factors affect to add points in the Credit Bureau and improve or worsen My Score:
1.- The first and most crucial point is that all your debts are up to date, that is to say, that at least the minimum is being paid. This includes that the payment has been made before the payment deadline.
If you are late in paying a monthly payment, you will lose points, but you will accumulate points again as you catch up.
2.- Another factor that affects the number of points in the Credit Bureau is your level of indebtedness. Contrary to popular belief, having a lot of debt is NOT that good.
The Bureau assigns more points to people who have a good level of credit but lowers points based on the amount of the debt; If you owe a lot and you are around the top of your credit limit, the chances that you will not pay the debt are more remarkable than if your debt level is lower.
As we investigated, if your debt exceeds 50% of your credit limit, they begin to subtract points.
3.- Although based on point No. 2, we might think it is convenient to have several credit lines that we do not use to add more points in the Credit Bureau. But the reality is that it is not like that because another factor they measure is the number of credits you have open, even if you don’t use them.
4.- Paying the Total each month generates more points than just giving the minimum payment since it is clear that what you earn is not enough to pay for everything you bought. In other words, you spend more than you make, and there is a high risk that you will not pay it back.
The client who pays only the minimum is more convenient for the bank because it is the one that generates interest on everything he buys. On the other hand, the totalero is NOT suitable for the bank because the bank does not earn money from interest.
However, the Credit Bureau offers a higher score to those who pay the total of their debts and less to those who only pay the minimum.
5.- This point seems very strange to me. Still, it turns out that the number of queries you, your creditors. And the banks make to the Credit Bureau negatively affects you because, according to them, when they consult your history, they “think” that you are looking for new credit and “assume” that you will not be able to pay it.
So if there are several consultations in 6 months, points are lowered.
Many consultations mean that you are looking for new credits because you will not pay them. Still, in my opinion, it is a mistake to assume that, because in my case. I am frequently looking for new and better credits (mainly mortgages) to improve the conditions of my current ones, and believe me, if I find something better, I WILL CHANGE.
6.- The time you have with the information registered in the Credit Bureau also affects you; The more time you manage your credits correctly, the more points you accumulate in your Credit Bureau Score.
Having money and making all your purchases in cash or cash does not help you improve your credit history or have a better score because the Credit Bureau measures in compliance with the payment of your credits and not cash purchases.
If you are a guarantor or joint and several debtors of another person who does not pay their credits, then you could be affected in your history, even if you spend all your debts on time.