How to Calculate Your Credit Scores Easily

A bank or a lender cannot guarantee that you will pay your debt on time. Their only option is to trust that you have what it takes to deliver on your promise. You will be bound by a contract of course, but they won’t gain much if you go to jail instead of paying them back. That’s why they calculate your credit score to check whether you are a trustworthy person or not from the beginning.

You should be aware of your score to know if you are considered as a good client or not. However, there is no way to accurately calculate it on your own. On the other hand, you can understand how they assess you so you can roughly know your credit score.

Here’s what you need to know.

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Payment History

History is the only way to predict the future. Your past actions sometimes define you when it comes to committing to a payment plan. That’s why a lender would request your payment history. It may contain information about your credit cards, loans, and store accounts. They will be able to know if you were late or missed one of your payments. They will carefully consider how frequently you are late, the amount of money, and whether missing deadlines is a  habit or a one-time occurrence.

An important thing that you have to pay attention to is closing old credit cards if you no longer use them. Some people ignore the card if it has reached the expiry date. Little do they know that it gets renewed automatically, and if they don’t pay the annual fees, it will be considered as a missed payment, which in turn affects their credit score.

Number of Accounts

The number and types of accounts somehow affect your score. If you have multiple accounts and you can pay them all effectively, that will help you build a good reputation. It shows that you can maintain a consistent flow of money to pay all of your debt.

However, keep in mind that if you close an account suddenly because you are unable to deliver, it will drop down the score you have been trying to raise. So, don’t open various ones if you don’t have a plan to keep them all working for a while.

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Check the Credit Bureaus 

You need to keep track of the ones that judge you in the first place. Those are the credit bureaus. They collect all of the available data and sell it to the creditor or lender. It may surprise you that there is more than one available source. They all have the same algorithms and methods of assessment. However, they receive different information, and this is the reason behind the inaccurate score.

Your credit score may be different because of missed information on their ends. Some tools such as a credit score checker can easily inform you of your current score in different bureaus. It is beneficial because the agencies don’t have to request all data from all of the sources. For that reason, the lack of information can lead them to reject your request for a loan. That’s why it’s important to know the discrepancies and clear them out for your lender.


When you fill a credit card or a loan application, the lender or creditor will check it and run a background check. That process is called a hard inquiry. It can affect your credit score because multiple requests at the same time mean that you are short on cash. It can also mean that you are drowning in debt and you need to pay one card using another.

They will consider you a high-risk customer. That’s why it’s advisable to spread out the requests over multiple months. That way, the inquiries won’t affect your score much and will be forgotten by the time you fill another application.

Another form of inquiries is the soft ones. They have little to no effect on your score. A company runs a background check as a part of a hiring routine. It can also occur when a bank checks your credit to see if you are eligible for specific offers. You have no control over them, and fortunately, they are insignificant.

Maintaining your credit score is not hard if you know how lenders or creditors assess you. All you have to do is to pay your debt on time and pay attention to the details you used to miss. Every request in the finances will show in your background check and may be used against you. That’s why you should stay ahead of them and check your score regularly with the help of online tools.

Interesting related article: “What is my Credit History?”