Your financial life revolves mostly around your credit score. It figures the interest rates one will be charged as well as whether one qualifies for credit cards and loans. Credit scores are very important, therefore you should keep an eye on them so that you may review the material in your credit report. To enable you to get the ideal credit offer, nevertheless, who can provide you with the appropriate credit score and credit report? Here are some choices:
Credit Bureaus
Your credit information may be obtained from three main national credit bureaus: Equifax, Experian, and TransUnion. To draft your credit report, these agencies compile information from creditors and lenders. Your credit score is arrived at using the information you submit in the credit report. Your scores might differ somewhat across the three credit agencies as the three credit companies may not record the same information on your credit history. You are entitled to free copies of your credit reports yearly from the annualcreditreportcom website to review for any mistakes or fraudulent activity. While you may buy your credit score from the credit bureau websites, there are alternative free methods of obtaining your scores (as shown below).
Banks and credit card companies
Some of the features that many banks and credit card companies now provide to their customers include the monthly credit scores on their websites or statements. For instance, Chase, Citi, and Discover offer free FICO credit scores to cardholders. The score they give you is often your FICO Bankcard Score, which is developed to assess the danger of consumers defaulting on their charge card debts. One advantage of getting your credit score from your bank or credit card company is that it is free and convenient to perform monthly checks in addition to checking your statement. Nevertheless, the scores they give may not be as high as scores that are used for mortgages, auto loans, etc.
Online Personal Finance Tools
Free credit scores and reports are available to customers at any given time through websites such as Credit Karma and WalletHub. These companies can afford to give your credit information for free since they get paid by commissions every time people subscribe to new credit facilities through the same companies. The scores that one gets from these websites are often VantageScore credit scores, which are also widely used by lenders but may be slightly different from FICO scores. The main advantage of using an online personal finance website over the other options is that it offers the opportunity to review the credit score at any given time. It is preferable to have as many people as possible keeping an eye on credit reports.
How to Obtain Your Official FICO Score
The choices above make it easy to keep tabs on alterations to your credit, but in case you need to know what your FICO score is lenders see you possess the following options. Remember, normally you have to pay for your actual FICO score except for the ones which are provided as a perk by some credit card companies as stated above. The official FICO website provides an option to get the FICO Score plus a credit report for $19. 95 a month. Or you can use many websites dedicated to personal finance such as NerdWallet or Credit Sesame which give you a FICO score once for $20. Purchasing your official FICO score from the source can help you understand it before applying for mortgages, auto loans, and other big financial steps.
Why Credit Check?
Having gone through the various ways through which you can check your credit score for free or for a small cost you may be wondering why you should bother monitoring your credit in the first place. Here are some of the top reasons keeping tabs on your credit report and score is so important: Here are some of the top reasons keeping tabs on your credit report and score is so important:
1. Check and recheck – Sometimes it might be a small error in reporting and yet it pulls down your credit rating. It also enables one to contest any errors that might have been made in the process Since most routine checks are done regularly this gives one ample time to challenge the mistakes.
2. Recognise identity theft – In case someone is using your identity to open accounts, it will be reflected on your credit report. The earlier you can detect such activity the better it is.
3. Monitor progress – If you are trying to reduce debts or create a good history of timely payments, tracking progress in the form of progress with your scores encourages you to continue making the right decisions.
4. Get better rates – A good score is viewed by most lenders as a low risk thus you will be provided with better rates. Good credit entails borrowing at lower interest rates which is beneficial in terms of credit cost.
5. Check recent credit inquiries – Every time you apply for credit, this is reflected in your credit report. Multiple new inquiries within a short period will slightly affect a person’s credit score.
Maintaining the Credit Score Checkups on a Routine Basis
While it may be anxiety-inducing to check your credit score frequently, it is recommended that you monitor your credit report from each bureau at least once per year and your scores every 90 to 120 days. You can also set reminders to review your credit score during significant financial decisions, which offers valuable information about the state of your credit before accumulating more credit.
All in all, it is clear that when choosing credit monitoring services, the most important thing is to have a convenient and reliable service rather than a free or paid one. Using a frequently updated credit monitoring service that you like ensures that you are not caught off guard in the future if your credit rating goes south.
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