Check my score for free: A credit score, also called a credit score, is an assessment of your credit history and your ability to manage the credit assigned to you. It is the result of a mathematical formula used to quantify your level of risk. It is therefore very important to always keep your score as high as possible.

The credit score is obtained after a detailed analysis of your payment history, where institutions evaluate your credit history (types and duration of your loans and whether payments were made before or after the due dates, credit purchases, etc.) and your personal data. It is important to note that this information is available to the companies that determine your score for a long time.

How credit scoring is done

A credit rating is usually assigned by an agency that specializes in this type of analysis. These companies collect data to assess the likelihood of an individual honoring their commitments financialBased on their own analysis, they determine the chances of a combined payment on a scale of 0 to 1000.

The score is calculated on a scale of 1 to 1000, where:

• 0-200: Very high risk of default;
• 201-400: High default rate;
• 401-700: Medium risk of default;
• 701-900: Low risk of default;
• 901-1000: Very low risk of default.

Credit ratings change over time, depending on behavior and buying habits. For example, your credit rating can be lowered if you have late payments, as well as credit cards that are always paid off in installments and many loans that are close to the limit. 

On the other hand, making all your payments on time can help improve your credit rating. Without a doubt, this is the best way to increase your credit score.

Credit scores generally range from 300 to 900. A good credit score is 670 or even higher. A rating of 800 or higher is excellent, indicating that the risk of defaulting on your payments is low.

This is one of the indicators that companies use to determine whether a credit application, such as a loan or financing, will be accepted and under what conditions.

Different factors can influence your credit rating, demonstrating your ability to manage credit. 

The companies that determine the scores don't say exactly how a score is calculated, but we know that the four most important points are:

Your payment habits 

The more you pay your invoices before the due dates, the better your score will be. On the other hand, late payments and defaults will damage your score.

Your use of available credit 

Approaching your credit limit can negatively affect your score. It is important to always consider a credit increase as an option to be used only if necessary, never as a new opportunity to spend more. 

The date your account was opened 

The age of your account can have a positive impact on your rating. This is because an account that has been open for a long time allows creditors to learn more about your payment habits. A bill paid well before its due date is a sign of good credit management.

Number and type of accounts opened in your name

A variety of accounts can have a positive impact on your score, for example, having three types of accounts. accountsa mortgage, a credit card and a student credit line.

However, having several accounts of the same type can be detrimental to your credit score: several accounts of the same type give you access to more credit and make over-indebtedness possible. 

The number of new requests you make  

Having too many credit applications can have a negative impact on your score. This display of lack of control is considered a distrust factor by the companies that determine your credit score.

But where is the credit rating used?

Lenders use credit scores to assess a customer's level of risk. Telecommunications companies, insurance companies, banks and government agencies also use credit scores to assess the level of risk. It's important to always know your score, and to work towards increasing it. 

There is more and more information about how your credit score is calculated. Let's take a closer look at the most common myths about credit scores.

1. Will my credit score be penalized if I check my score?

Not at all! On the contrary, in order to control your financial situation and detect fraud, it is very useful to regularly check your credit report. But be careful: you should always check your balance, not apply for credit every day.

2. It is impossible to oppose the assessment sent by creditors to credit agencies

You always have the right to report any inaccuracies that appear in your file to the credit agencies. Therefore, if you find any incorrect data, report the error immediately. 

3. Changing my consumption habits won't change my credit rating

The credit score takes into account credit card balances and other loans, so reducing this balance is always recommended. Cutting spending and therefore getting into less debt will positively affect your credit rating.

4. My company's debts don't affect my personal score

In fact, even if the accounts are separate, creditors often ask for a personal guarantee for the money lent to your company. If your company is in trouble, your personal score could also suffer.

5. Using my debit card responsibly improves my credit rating

A debit card is not considered credit. With a debit card there is no concept of credit, you're just using the money you already have, so it doesn't affect your credit score

Why should I be careful when checking my score?

You can check your credit score individually. In other words, you can check your score yourself free directly on the websites of the credit bureaus (Serasa, SPC, Boa Vista). This is the correct way to make an inquiry.

How can I check my score for free?

In Brazil, there are four main companies that determine your credit score. The scores are usually different, as each company uses its own form of analysis, but they are almost always similar:

• Serasa; 
• Boa Vista;
• SPC;
• QUOD;

You can check directly on their official website for free

What's the wrong way to check my score?

There are some credit agencies that analyze your credit score and also charge for it. When these companies check your cpf, your score is at risk of falling. Therefore, know that you don't need any agency to check your credit score for you.

Conclusion

To achieve loans With lower interest rates and a greater chance of loan approvals, it's very important to know your credit score closely. We know that unforeseen events happen in life, so we have some advanced tips for increasing your credit score.