An individuals credit score is a very important signal of your financial status. Lenders will use this credit score to determine whether or not they will offer you a loan and what your interest rate will be.
Does my credit score affect me getting a loan?
Do credit scores change that much over time?
Your current credit profile – how well you have managed your credit will affect how a specific action will impact your score. For example, new data listed on your credit report, such as the opening of a new credit account, is more likely to have a larger impact for an individual who has a limited credit history in comparison to a person with a large credit history.
The change being reported – the extent of the change which is being reported will have an impact on the score. For example, a person who typically pays all of their bills on-time and continues to do so will likely see only a small impact on their score one month later. On the other hand, if that same person misses a payment or files for bankruptcy, then they will most likely see a substantial impact on their credit score the following month.
How quickly information is updated – there is sometimes a delay between the time you perform a credit action such as paying off the full balance of a credit card and when it is actually reported by the creditor to the credit bureau. It’s only when the credit bureau has processed the new information that you will see an effect on your credit score.
Keep in mind that even small changes in your credit score can be very important when you are attempting to obtain a specific credit score level or if you are trying to reach the loan requirements of a certain lender.