Have you ever wondered what goes into your Experian credit score? As you may know, Experian is one of the three major credit bureaus in the United States (along with Equifax and TransUnion). Each of them collects essentially the same information, but there can be slight variations in the data they report, which can lead to small differences in your credit scores among the three bureaus.
Your credit score is important because it affects your ability to get loans, credit cards, and other forms of credit. It also directly impacts the interest rates you’re offered. A higher credit score makes you a lower risk borrower, so lenders will be more likely to approve you for credit and offer you lower interest rates.
How your Experian credit score is calculated
The exact details of Experian’s credit score calculation formula are a closely guarded secret, but here’s a general overview of the factors that typically influence credit scores, including the Experian Credit Score:
- Payment history: this accounts for 35% of your score, and it’s the single most important factor in determining your credit score. A history of making on-time payments will help to improve your score, while a history of late or missed payments will hurt it.
- Amount of debt: what you currently owe accounts for 30% of your score. Lenders want to see that you manage your debt responsibly, so a low debt-to-credit ratio will help to improve your score.
- Credit history length: the age of your accounts for 15% of your score. The longer you’ve been using credit and the older your accounts are, the better it is for your score.
- New credit: This accounts for 10% of your score. Lenders want to see that you are not opening too many new accounts too quickly, so opening a lot of new accounts in a short period of time can hurt your score.
- Types of credit: also known as your ‘credit mix’, this accounts for 10% of your score. Lenders want to see that you have a variety of credit accounts, so having a mix of credit cards, loans, and installment accounts will help to improve your score.
How often should you check it?
Your Experian credit score is updated once a month, and currently you can access it free every week—until the end of 2023—by using AnnualCreditReport.com. After that, you’ll be able to check it there once a year at no charge.
If you want to check your Experian credit score more frequently (once a month is recommended), you can subscribe to a credit monitoring service (Brigit offers this feature). A lot of banks and loan providers offer free credit score updates to their customers, so you may be able to monitor your scores that way, as well.