Does Your Credit Score Change Every Time You Check It? Here’s Why!

A credit score is a numerical indicator of an individual’s credit history, representing their creditworthiness. It is crucial for everyone to regularly monitor their credit score to maintain a healthy financial profile. The higher your credit score, the better your financial reputation among financial institutions.

In Indonesia, you can check your credit score for free through the Financial Information Services System (SLIK) or Private Credit Bureaus (PCBs) like PT CRIF Lembaga Informasi Keuangan (CLIK). However, it’s essential to understand that credit scoring models vary. SLIK uses a Collectability (KOL) scale from 1 to 5 to indicate your credit standing, while PCBs like CLIK use a three-digit numerical score.

Changes in your credit score are expected, especially when you have active financial transactions such as loan applications, debt payments, or ongoing installment plans.

Factors That Influence Credit Score Changes

According to CLIK, there are possibilities that make credit score changes in negative ways:

• Amount of Debt

Taking on additional loans while having existing debt, especially with late or missed payments, can severely impact your credit score. Applying for multiple credit accounts in a short period can lower your score temporarily, as it may indicate financial distress or the potential to take on too much debt.

• Closing an Account

If you pay off a debt and immediately close the account to avoid future temptation, think again. Closing old credit accounts can shorten your credit history and reduce your overall credit limit, and potentially lowering your score.

• Error on the report or late reporting

One problem that is out of the debtor’s control is when their credit report has an administrative error or is not updated. So, if you find out that there is data that does not match, immediately check back to the institution where you applied for the loan. Alternatively, you can also check your score at a private credit bureau. For information, debtor credit data reporting can also be hampered when credit provider institutions do not regularly report their customer data to credit information management institutions.

Read also: Have You Checked Your Credit Score Through a Private Credit Bureau? Discover the Differences!

The Importance of Regular and Comprehensive Credit Score Updates

Despite its critical role in determining financial health and access to credit, many consumers may not realize that their credit scores are not always up-to-date. This can lead to inaccurate evaluations of your creditworthiness, potentially affecting their ability to secure loans, credit cards, or even favorable interest rates.

“CLIK urges debtors not to rely on just one source of credit report, especially when you applied for multiple loans from traditional and digital loan providers. If your creditors don’t provide updated data to OJK or Private Credit Bureaus, your credit score may not reflect your current financial situation accurately. Worst case could happen if the credit provider does not report it at all, making your credit history untraceable and affecting your overall credit score,” said President Director CLIK Leonardo Lapalorcia.

According to Leonardo, changes to credit scores generally occur at least once a month. However, if you have multiple loans or credit cards, it could change more often. Each time any one of your creditors sends information to the OJK or Private Credit Bureaus, your score may refresh.

CLIK always strives to make a real contribution to strengthening the national credit industry, especially in terms of making it easier for people to get access to credit and have a handle on accurate credit information data. “The current credit reporting landscape often leaves consumers unaware of where their credit profile stands. To address this, we propose a collaborative approach involving financial institutions, Private Credit Bureaus and regulators. By working together, we can build a standardized framework that ensures timely and accurate credit score updates, which can ultimately empower more people to have access to finance,” said Leonardo.