Last year, major credit reporting companies announced a plan to overhaul how negative information is handled on credit reports. Now, for many consumers, credit scores are going up, in some cases by more than 40 points, according to a report released this week by the New York Federal Reserve.
Your credit score is a measure of how trustworthy you are in the eyes of financial institutions. Scores range from 300 to 850, and a good score, one of 700 or above, can help you qualify for a better interest rate on a loan.
"Payment history – how you have paid your bills in the past — is one of the most important factors in the FICO score. Any negative payment information such as missed payments, public records (e.g. tax liens) and collections can impact the FICO score," Can Arkali, principal scientist for analytics and scores at FICO, tells CNBC Make It.