I am sure you have heard that credit score is useful when it comes to borrowing, crediting, renting, supplying utilities, getting a mobile phone connection, and even a job. To answer your question, yes, it is possible to check your credit score by yourself. The answer is yes. Here are the key facts you should know when it comes to monitoring your credit reports and scores by yourself.
Getting Your Credit Reports The first of the steps to take to check your credit score yourself is to obtain your credit reports. Your credit reports provide detailed information about your credit history, including credit reports provide detailed information about your credit history, including:
- An example of a current assets sub-heading is ‘‘Accounts you have open and closed. ’’
- Debt payment history
- Investigations carried out by loan providers
- Such things as bankruptcies, judgments, etc., which are available for public access.
All this information is used in the computation of credit scores. You should review your credit reports so you can see if there are any mistakes, or simply be aware of what affects your score.
Each consumer can request a full version of each of the three credit reports from the three major reporting companies: Equifax, Experian, and TransUnion once every twelve months. You can get these reports at annualcreditreportcom, the website that is specified by federal laws. Be careful of other websites that offer ‘free credit reports’ for a set period as if you fail to cancel before the free time is over you are automatically enrolled to receive monthly credit reports at a certain fee.
When you request your free reports, you can receive one from each bureau at once or stagger them so you monitor your credit every three months. Although creating reports is a one-time process, it is recommended that you check your reports occasionally to notice any changes and mistakes. It is recommended to check all three reports since the information that each bureau has may be different.
Checking Your Credit Scores However, credit scores are as equally important as credit reports when it comes to evaluating credit health. Various credit scores are used by lenders, most commonly known as FICO Scores which is a credit score ranging from 300 to 850. Higher scores mean that lenders are less likely to incur credit losses from extending credit to borrowers.
The only sure way of trying to check your scores by yourself is to obtain the FICO Score from Fair Isaac Corporation. With the help of MyFICOcom, consumers can get a look at their FICO Scores from the three credit reporting agencies, as well as the specifics on how their scores are being calculated. Credit card companies and banks may also offer free FICO Scores on statements or even through an online account.
Other companies such as Credit Karma and Credit Sesame allow you to see certain credit scores known as VantageScores for no additional cost. However, please remember that the lenders probably utilize the FICO Scores when considering your credit applications. Having both FICO and VantageScore provides you with a much broader view of your credit standing in the long run.
What Affects Your Credit Scores? Since you can obtain your credit reports and scores on your own, what determines these scores anyway? The FICO scoring model examines five main areas to calculate your scores: The FICO scoring model examines five main areas to calculate your scores:
Honor roll – Whether one pays credit accounts such as loans and credit cards on time. This category contributes a large portion of your scores.
Credit utilization is the second factor that affects credit score; the ratio of credit that you have used to the total credit available. Having more than thirty percent of your total credit limit also affects your scores.
Credit history length – This is the length of time that you have had credit accounts active. Accounts established are perceived to be less risky as compared to those that are new.
New credit – How active you are in obtaining new credit in the last recent months including newly opened credit cards. This can be a sign that too many new accounts have been opened, and this is not good for your scores.
Credit mix – Whether you have used credit cards, installment loans, mortgages, and the like, using several kinds is good for your scores.
Knowing one’s current status in each area directs the course of action for increasing the scores. Are you required to pay your bills on time month after month reduce your credit card balances, let new accounts become established, or apply for more credit, if necessary? Conducting self-evaluations on the reports and the scores aids in identifying areas that require improvement.
In this article, we’ll look at how monitoring can assist in credit building. It is important to note that merely looking at your credit reports and credit scores cannot increase your credits. But there are many benefits to independently viewing your credit files frequently: But there are many benefits to independently viewing your credit files frequently:
- Search for inconsistencies or mistakes that can be refuted. Fixing wrong reporting can enhance your ratings.
- They will include signs of identity theft such as accounts you never opened. It is possible to ask for fraud alerts and to take other measures to protect your identity.
- Track score goals as they are attained. You will be in a position to tell when you have adopted positive credit habits such as using credit cards carefully to influence your scores.
- Provide recommendations on whether to open or close accounts for any given business. Applying for new credit hurts scores in the short run but fosters a positive credit history in the long run. They also reduce scores slightly, particularly when one closes credit cards that he or she no longer uses. Monitoring helps to prevent such situations that lead to score drops from the following scenarios.
- Specific follow-up activities enhance your scores. Find out where you need to do more so that you can see how you can improve your credit standing in the future.
Although encountering errors or past mistakes will do a credit report and credit scores no good, checking your credit regularly proves beneficial. Following the correct credit behaviors leads to better credit scores month after another. Be patient because one has to work hard to improve credit scores. However, you have to be vigilant and ensure you maintain your credit health to regain control of your credit standing.
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