It is, therefore, crucial that you keep your FICO score as healthy as possible because it is the most important number in your financial life. It is a three-digit number that indicates how creditworthy one is, meaning how likely you are to repay a loan. Your FICO score is used by lenders to decide whether or not to extend new credit to you and what interest rates they will be willing to offer.
Since the FICO score is so crucial in obtaining credit at reasonable rates, you might be curious if you can check your score as often as you desire. The answer is yes. While lenders must purchase your score whenever you apply for a loan, you can obtain your most recent FICO score at any given time in several minutes on your own.
FICO Score and What It Is Meant To Represent
To understand how to check the FICO score on your own, it is necessary to know what the FICO score is and how it is computed. FICO is just an abbreviation of the name of the company that developed the best-known credit score system – Fair Isaac Company. By credit score, most lenders are usually referring to your FICO score at that particular instance when they are discussing the issue.
Your FICO score is a three-digit number that may be anywhere between 300 and 850. In general, the higher the FICO score, the better. It is very good and takes you to the best lending terms if your score is above 700. Credit risk below 600 is considered as poor or bad credit scores.
FICO scores take into account five primary factors from your credit reports:
Credit utilization – What proportion of your credit limit you are currently using? This has the greatest influence on your score. Credit utilization ratio – Total credit limit that one has divided by the actual credit used. Less use contributes to your score. Credit history – The length of your credit history, or how long you have been using credit. A longer history helps. Credit mix – Whether you have experience in managing credit products such as credit cards, mortgages, auto loans, etc. Mix helps. New credit – applying for many credit facilities within a short period will be detrimental to your score.
FICO uses information on those five areas from the credit reports you get from Experian, TransUnion, and Equifax. It applies an algorithm to generate your three-digit number: a probability scoring system. There are various credit scoring systems, but the most widely used one is FICO.
How to Get Your FICO Score
After getting information on what creates your FICO score, you likely need to know your current FICO score and how it fluctuates with time. Fortunately, many ways are available in today’s world to get your FICO score for free or a token amount. Options include
Free FICO Score through Credit Card or Bank – Today, many credit card companies and banks provide the FICO score to cardholders or consumers with banking accounts for free. For instance, Discover Card offers updates to the cardholders often. Simply log into the account portal. If your financial accounts do not provide free score access, you should negotiate for inclusion.
They are free through Credit Karma – Credit Karma is a free online platform and application that allows users to monitor credit report information and the VantageScore of TransUnion and Equifax. This score model is, as mentioned earlier, somewhat similar to FICO. Still a helpful means of tracking credit change for free.
One-time or Ongoing Access from myFICO – There is no better way to view your real FICO score than by going directly to the source: myFICO. Different paid subscriptions allow you to track your score as frequently as once per day. Can be bought for a one-time fee of approximately $20 or $30 every month. Good for tracking the changes in the credit score over time and especially the differences between the three major credit bureaus.
Apart from offering the three-digit score, these FICO and credit score services also give full credit report information, a breakdown of factors benefiting or negatively impacting the score, a score comparison to the national averages, and a guide on how to improve the score. It is important to check your score often so that you know how your actions affect your credit score.
Effects on Your Score When You Monitor Your FICO Score Yourself
One common question that many consumers have is whether checking one’s own FICO score will damage it in the process. The short answer is no. Checking your credit score does NOT affect the score in any way. The only way your score can be different is if the data included in your credit report, such as your balances or loans, goes through alterations.
The one minor exclusion is where you buy the FICO score one time, the inquiry to your reports will show up as a ‘soft inquiry. ’ Soft inquiry includes the one that you make to the creditors, and therefore they do not affect your score. On the other hand, an application for new credit that leads to a ‘hard inquiry’ will have a slight impact on your score in the short term. However, if you get the chance to glance at your report or the score to see it, this is not considered a hard inquiry.
How to Check and Boost Your FICO Score
Here are some final tips when it comes to monitoring and managing your credit score on your own: Here are some final tips when it comes to monitoring and managing your credit score on your own:
Get your score from different places – Besides getting your FICO score from myFICO, you can also go to credit reference services that offer your VantageScore. There are two ways to calculate your number, depending on which scoring models were used; both with the full reports.
Revisit periodically – Do not only check your score once. If possible sign up for continuing access with a place such as myFICO or Credit Karma so that the user can track how the score changes with credit application, payments, utilization, and other behaviors.
Why – Check that any score source you employ also includes information on which aspects of your credit report are benefiting or harming your number. This makes it easier for you to identify areas you need to work on to get better scores.
Dispute errors – When you have recorded information that may pull down your score unnecessarily, you should dispute it to the bureaus to make the corrections. Sometimes, this can give you just a lovely, easy addition to your score.
Credit management – Of course, the key to improving your FICO score is to engage in good credit behaviors such as paying all the bills on time, maintaining low balances on credit cards, getting credit reports infrequently, and proving creditworthy.
To check your own FICO score is quite simple and should be done routinely – it does not affect your credit in any negative way. It’s better to be an empowered consumer and monitor your number on your own so you are aware of your credit status and can actively work towards achieving your creditworthiness objectives. Keeping track and managing your FICO score is essential to ensure that you will be able to secure low interest rates from lenders especially when you need it for important purchases and expenses in the future.
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