Introduction to Credit Scores Your credit score is a number used by lenders to determine how risky or safe you are in repaying the loan. Credit reference agencies help your lenders determine whether or not you qualify for credit cards, loans, mortgages, or any other form of credit. It also applies your score to decide on the interest rates to extend to you. That is why credit score plays a critical role in the management of an individual’s financial status.
The most widely recognized credit scores are FICO scores which have been developed by the Fair Isaac Corporation. FICO scores are between 300 and 850 – the closer to 850, the less risky a borrower is deemed to be. A figure of over 700 is usually considered healthy. People with high credit scores end up paying much less in interest in the long run. That is why it is crucial to monitor the score and detect any issues as soon as possible.
Contrary to common belief, you are not limited to a single credit score. It is important to note that there are well over thirty different credit scoring models utilized by creditors. Thus, information from a single source and only one score provides incomplete information. It is always beneficial to get your full credit reports as frequently as possible so that you have a better view of your credit situation with the major CRAs.
Why Should I Get My Credit Score for Free Earlier, consumers had to pay for their credit scores, which are now easily available online at no cost. But a new federal law gives you the right to get your full credit reports, and scores, from each of the three major credit reporting agencies once a year free. Therefore, it has now become easily free to check your scores. Do so by at least reviewing your scores once a year and frequently to monitor your credit.
The second reason to track your score is to identify mistakes in your credit reports. They can negatively impact your score and bring it down to a level that is unfair to you. Under federal law, you have the right to challenge any information that you think is inaccurate. Fixing errors will increase your score. Therefore, monitoring credit and disputing problems is crucial to your financial well-being.
How to Obtain Your Free Credit Scores and Credit Reports Annually
However, there are several fast ways to obtain your entire credit reports with scores for free at least once within 12 months. Here is how to access your credit scores for free from the major consumer reporting bureaus: Here is how to access your credit scores for free from the major consumer reporting bureaus:
AnnualCreditReport. com is the federally mandated website where you can get a free credit report from each of the three major credit bureaus, once every year. To get started, go to annualcreditreport. com and click on the “Request your free credit reports” link. Some of the basic details that you should furnish include your full name, your address, and your social security number. Next choose if you wish to receive free reports from Equifax, Experian, or Transunion.
AnnualCreditReportcom is the only website that is legally mandated to take orders for the free annual credit report that is allowed under the law. Other sites may advertise “free credit reports” or “free credit scores,” however, these offers are usually accompanied by hidden fees. Annualcreditreportcom provides the real free credit reports and scores that are promised to you every year.
Once you have submitted your reports online, you should go through them thoroughly to identify any areas that are negatively impacting your scores. In case you notice any errors, you are advised to follow the dispute process as highlighted in the report.
MyFreeCreditScore Services Some of the well-known financial websites provide consumers with more chances to monitor their credit reports and scores for free throughout the year. Some of the other sources which offer free access include credit card companies and banks which offer the service to their customers. The offers vary, but often allow you to access one or more of your credit reports and scores for free: The offers vary, but often allow you to access one or more of your credit reports and scores for free:
Credit karma – It provides the latest TransUnion credit report and VantageScore credit score for free. Registration is required.
CreditSesame – Furnishes annually, free updated reports and VantageScore credit scores. Registration is required.
Discover Credit Scorecard – the monthly statement of Discover card, if you have an account with this company, provides the customer with the FICO credit score for free.
Citibank – Free FICO credit scores for Citibank credit card holders can be accessed through an online account.
The free services usually include at least one of the three major credit reports and scores for you to monitor your free credit score. This will help you understand your creditworthiness to a certain extent. It is always good to compare your scores from different platforms to have a wider view of your credit status.
Key Takeaways Due to federal law and consumer credit companies, you can get your credit reports and scores for free. You just need to ask for them through AnnualCreditReportcom or another reliable, free score service. After that, it is recommended to check your reports and scores as frequently as possible to monitor your credit position. Getting to report mistakes as soon as possible or notice a drop in your scores enables you to know of any problems if you need to fix your credit. Thus, it is important to take advantage of the free credit check whenever possible – at least once a year – to keep an eye on this essential sign of one’s financial state.
Conclusion Credit scores control your financial freedoms and the interest rates that are charged to you. That is why you should check your scores as often as possible and, where possible, use free resources. Under federal law, you have the right to receive a free credit report if requested from the following credit reporting companies once in a year. Numerous sites offer free grade credit scores. Using those options allows you to monitor your credit status and address any discrepancies as soon as possible, so they do not affect your wallet. Thus, it is necessary to check both the entire credit reports and credit scores annually. Free credit monitoring can be cheaper over the long run of your borrowing across all your credit.
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