Your credit history has an impact on a wide range of situations, so it’s important to stay up to date on your credit reports and do everything you can to maximize your score. Credit is based on a variety of factors, but there are a number of key dates that play an especially important role in determining your score. Understanding each of these terms will help you gain a clearer picture of how your credit score is calculated.
1. Date Reported
The date reported describes the time at which a credit bureau received given information about your credit. If you missed a credit card payment, for example, this data would likely have been reported to the credit bureaus the day after the payment was due.
Credit bureaus only use the most recent information to calculate your credit, so older reports shouldn’t have an impact on your score. Your reporting date may or may not be the same as your statement date, so check with your provider to learn more about their policies.
If something has changed since your credit was last reported, it’s important to double check that the difference is reflected in your credit score after the next date reported. After each date reported, you’ll be able to view your any updates to your credit score.
2. Date Opened
Each account’s date opened represents the day you originally opened the account. The date opened is used to calculate the average age of all your credit cards. A higher average age increases your credit history, so you should avoid opening new accounts directly before getting a loan, mortgage, or other form of credit that involves a credit check.
While it’s better to have the highest average account age possible, that doesn’t mean opening a new account is never a good idea. As long as you pay off your balance each month and avoid using more than roughly 30 percent of your credit limit, opening a new account could increase your credit score over time after the initial drop.
3. Date of Last Activity
The date of last activity reports the last change on your account—if you missed a payment, for example, the due date would be your date of last activity. As with date reported, the date of last activity needs to be relatively recent in order to affect your current credit score. If you haven’t used a credit card in a while, set a few small expenses to charge to that account in order to reactivate the card.
Dates of last activity can describe both positive and negative changes, and they’ll begin to have less of an effect on your credit score over time. If you’ve recently missed a payment or defaulted on a loan, your credit score will gradually recover as the date of last activity on that account becomes less and less recent.
4. Date of Request
Dates of request, or inquiry dates, tell you when an inquiry was made on your credit history. Credit checks are often performed when you apply for a loan, credit card, or other form of credit.
These requests are divided into soft pulls and hard pulls. Soft pulls don’t affect your credit score, while hard pulls decrease it slightly for a short period of time. While hard pulls usually don’t make much of a difference, it’s still best to avoid them if you know you’ll need a line of credit in the near future.
A soft pull can be completed without your knowledge, but you have to consent to a hard inquiry on your credit. Whether or not the hard pull is worth losing a few points on your credit score depends on your current financial circumstances.
Hard pulls only remain in your credit history for two years, so your dates of request make it easy to tell when a credit check will stop affecting your score. Even just five or ten points can make a big difference, especially if you’re taking on a major debt like a mortgage or auto loan.
Increasing your credit score gives you access to better rates on credit cards, personal loans, and more, and the first step toward improving your credit is simply checking your score regularly. Knowing the meaning of these dates will help you understand your credit report and start looking for ways to raise your score.
Author Bio: Logan is a CPA, personal finance expert, and founder of the finance blog Money Done Right, which he launched in July 2017. After spending nearly a decade in the corporate world helping big businesses save money, he launched his blog with the goal of helping everyday Americans earn, save, and invest more money