Check Your Credit Score
If you don’t know how to check your credit score then you are not alone. Many people don’t know how to get their credit report or their scores. We show you how to receive them at no cost.
You don’t need to apply for credit to buy something thinking it’s the only way to keep tabs on your credit profile. This results in unnecessary credit inquiries.
Too many credit checks recorded in your file add up and over time this can lower your score. Having inquiries within a short time is okay, to a point.
For example, if you’re shopping for a car and submit credit applications at different dealerships over a few days, it’s probably not going to affect your profile. But continuing to submit credit applications without being approved is likely to drill down your scores.
Your profile can be viewed negatively with so much activity. These hits to your credit record can drop that important number, your FICO.
Why You Should Check
Credit scoring is used by landlords, insurance companies and employers. Lenders check credit scores when they offer auto loans, mortgages, and credit lines. Being accepted for a credit card can depend on your score. It indicates how likely a borrower is to repay their loan.
When a bank offers financing for a person with a bad credit score, they charge higher interest rates and fees to offset the potential risk the low score represents.
Paying rent is similar to paying other bills, so renting a home usually depends on a tenant’s credit score. Renters with low credit scores are required to add someone to their lease as a co-signer and pay higher security deposits than tenants with favorable scores.
Insurance companies and employers want to know how responsible a person is. Both associate low credit scores with behavior that’s riskier and they point to statistics that support this. Checking your credit score becomes important when you realize that credit scores affect almost all aspects of your life.
How to Do-It-Yourself
Before you accept any service that offers to sell you a credit report there are things you should know. If you haven’t requested your credit report over the last 12 months then you will likely be able to get it at no cost.
Federal regulations allow you to get a free credit report once each year from each of the three credit bureaus. The problem with this is that it doesn’t offer your score free, just the free report once a year. Checking your credit score for a fee is still a good deal since the report is free. You can learn more about credit reports on this website.
There’s a great way to check both your credit score and report free. It’s the VantageScore 3.0 version which is one of the mainstream scoring methods along with FICO used by creditors to evaluate your credit profile. One nice benefit of this popular service is that it doesn’t require you to enter your credit card information. And it’s an easy online form. This saves you time and money. This is a smart way to manage your finances with free credit score checking on the internet.
What You’re Getting From the Credit Bureaus
The main credit scoring system used by banks and other lenders to decide if someone will be offered credit is called the “FICO” score. A good FICO score is between 680-700. If your score is above 720, congratulations: Scores above 720 normally qualify for the best interest rates and financing terms.
Another type of credit scoring system is called VantageScore. It was developed in 2006 and is used by all three of the major credit reporting agencies. Just like FICO, VantageScore 3.0 ranges from 300 up to a maximum of 850.
Why do the credit bureaus bother with different types of scores? There are different answers depending on who you ask. Some in the credit and financial services industry promote Vantage as a more user friendly scoring system than FICO. They also state that it’s more uniform than other methods with scoring factors used to calculate it. FICO is still the score most commonly evaluated by creditors. For now, it is what you will want to focus on improving.
Save Money When Checking Your Credit
If your circumstances haven’t changed since your last credit report and you want to save money, you can order only your FICO score without a report. At MyFico.com you’ll be able to purchase your official FICO score. Check the site for current pricing because it can change, but it’s only a nominal fee. If you want to monitor how your score changes over time, you can sign up for a subscription that updates you with periodic reports.
There’s a useful tool on the site called the Credit Simulator. This lets you view the effects of different actions on your credit score. It’s included in the month-to-month credit monitoring service.
Regardless of your financial history, you can take steps to optimize your credit score. It begins with knowing how to get your credit profile and then using credit laws to your advantage. We have several resources available to help you use little known laws and methods that can boost your scores, so bookmark this website and return for updates.