Your credit score is one of the most important factors in your adult financial life. It is the single most important factor in deciding whether you can borrow money to buy a house, get a personal loan or finance a car. If that’s not bad enough your credit score will also determine how much you pay for things like car insurance, life insurance and home insurance. It is important that your credit score is at least considered to be “good.” Anything less than this and your credit score will start to impact your day to day life. Unless you know what you’re doing accessing your credit score can be complicated and expensive. Our guide will help you avoid the pitfalls and find the best way to review your credit score.
What Is A Credit Score?
Your credit score represents your trustworthiness to a lender. How likely are you to pay back your loan on schedule and in full. The score is calculated based on information in your credit file. Your history of debt and other factors. Banks, other types of lenders and insurance companies will all use your credit score to assess any application you have made to borrow money or to buy an insurance policy. The higher your credit score the more trustworthy you will be considered as a borrower.
Things To Bear In Mind Before Paying For Access To Your Credit Score
Are they calculating your scores using the FICO formula? A non-FICO score is still important, but will not be the same as your FICO score.
Credit Bureau Data
Which among the three major credit reporting agencies will be used? Experian, TransUnion, and Equifax provide the data where they will derive your score from. Your results may vary, and it almost always helps to get your scores from all three of them.
Will the company throw in credit analysis? Will they tell you what is keeping your score down? Will they give advice on how to raise your rating?
Options For Accessing Your Credit Score
You can find a lot of websites around that will offer you these services for free, or for a minimal fee. Here are a few services that will give you your credit score for free (or for a minimal fee):
Online Services Like Credit Karma, Bankrate and Credit Sesame
These services are free. All you need to do is sign up, answer the questions they set up, confirm your identity, and get your credit score. They will also include a comprehensive look at how your credit score was reached. They do not include a FICO score. Credit Karma bases their data from Transunion and Equifax, Bankrate from Equifax, and Credit Sesame from Experian National Risk Model.
Credit Card Statements
There are a few credit card companies who offer free credit scores in the monthly statements they provide. These include: Capital One Venture Rewards credit card, Discover it card, Barclaycard Rewards MasterCard, First Bankard, Citibank and Walmart. Sign up for the credit card of your bank that provides this service, and you can get your FICO score included in your monthly statement. You can get this free with cards that have no annual fees. The Capital One Venture Card even provides access to their Credit Tracker, and they provide information on what affects your credit score.
Ally Bank offers free access to FICO scores so that you can understand your credit score better. Ally Bank is a fantastic online bank that offers a wide range of services, including auto loans, and they focus a lot on consumer financial literacy.
This requires a small fee, but you can get your score directly from FICO. They have a credit monitoring service starting from $19.95 a month and can be cancelled anytime.
Credit Reporting Agencies
The three credit reporting agencies we mentioned earlier all allow access to your credit score information. Experian has a 7-day trial for $1. They also offer your FICO score based on Experian data. Equifax and TransUnion offer credit scores based on their scoring models.
Read Your Report For Free
If you are particularly interested in seeing all of the details of your credit score, you can get a copy (for free) of your full credit report at annualcreditreport.com. You will need to register and answer a short list of questions that will verify your identity. You can access your credit score from all three reporting agencies from this site once a year.
When looking at your credit score report, look for the following information:
1. Items that are causing harm to your credit score. Check and see what you can do to address these issues.
2. What you can do to improve your credit score.
3. Make sure that every piece of information you have on your report is correct. Your rating may be affected by this – identity theft, or even a delayed payment that was not delayed but a clerical error.
It pays off to always be on top of your credit score. Building up a good credit score at an early age will make it easier for you to borrow money at a lower interest rate and get cheaper insurance quotes through the years. It will make your financial decisions easier and help keep you in a healthy financial position.