How to Check Your Credit Score

How to Check Your Credit Score for Free

According to Pew Research, over 44% believe that it may take them three years or more to get back on their feet. And 10% think they will never recover financially. A bad credit report element stays for about 7 years. Any negative financial impact from the COVID-19 pandemic can affect you until 2027.

Many entities care about your credit history, including potential employers, utility companies, mortgage lenders, and banks. As a result, you must furnish your credit report, know your credit score, and familiarize the relevant credit bureaus that produce that information.

It is crucial to protect your credit score. This article covers how to check your credit score for free. 

How to Check Your Credit Score, Credit Score

What Is a Credit Report 

A credit report is a comprehensive report showing a person’s credit history and other personal financial information. Registered credit bureaus commonly produce the report in your resident country. 

Credit reports enlist your current debt, history of bill payments, default items, and other financial information. Also, it contains a list of people you owe money to or if you are bankrupt, have ever been sued or arrested. Every credit report item affects your credit score ratings that lenders use to gauge your ability to pay bills in time.

A credit score will influence whether you get a credit and the interest rates you’ll pay. An excellent or good credit score shows low financial risk; you can quickly get credit at favorable rates. 

An average credit score can get you credit, but it may have higher interests than a person with an excellent credit score. A bad or poor credit score marks you as high risk and may deny you credit. 

Why You Should Check Your Credit Report

As mentioned earlier, the impact of credit reports and scores does not stop at lenders. Rental property owners, prospective employers, and insurers will use it to render their services to you. So, a poor credit score can deny credit, rental space, insurance, and economic opportunities. Or, if you get the services, you pay more for them than others with good credit scores. 

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Several companies offer credit reports, and you don’t know which one lenders or employers will use. Unfortunately, credit reporting bureaus that collect and submit your credit and personal information used in the report are prone to errors. Also, they may fail to update your information in time to remove any debt items even after clearing them. 

Correcting any errors on credit reports can improve your credit scores. An error by a credit reporting agency can cost you a life-changing economic opportunity. You should check all your credit reports to ensure they are error-free and up-to-date. Credit repair services can make the process hassle-free using thorough due diligence and follow-up. 

They can even reach out to those you owe money to and work out an amicable payment arrangement. Adding extensive tracking on all agency’s credit reports, you can only ensure that accurate and updated information is reported. Collectively, these efforts will improve your credit score and improve your image towards lenders. 

How to Check Your Credit Score for Free 

So, the first thing is getting your credit report from each credit reporting bureau (CRB). Three primary credit bureaus gather extensive credit and personal information. They are Equifax, Experian and TransUnion. 

These CRBs provide credit reports on companies and individual people upon request. Any legally allowed entity or person can request and access your credit information. So, you should get reports from each of them. 

Each CRB has a different credit score and items covered in the report. You are entitled to a free credit report after every 12 months as per the FACT Act of 2003. Each CRB will issue you that free report, so you can get 1, 2 or 3 of them. 

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You can get the free annual credit report by visiting www.annualcreditreport.com. Alternatively, you can call (877) 322-8228. You will provide your name, address, birth date and social security numbers to access the report. 

But, you may need to access the credit reports at various times of the year for various reasons. In such a scenario, you will apply for a credit report at a fee. A detailed analysis after every four months can help pick up any changes and errors on the reports. You can get reports from each CRB and compare them:

Experian

You can access the Experian credit report from here. It is worth noting that Experian is using the current FICO score model 8, which varies across specific industries. But for mortgage risks, it still uses the FICO score model 2 as part of risk evaluation. 

Most businesses prefer using model 8 to measure a borrower’s risk level. The FICO score has a range of 300-850. An 850 credit score is considered excellent, and 750 is a good rating. You should leverage credit repair DIY practices or credit repair companies to get an excellent credit score if you have low ratings. 

Here are the main components of the FICO score model 8: 

  • On-time payments influence 35%
  • The credit utilization ratio on a credit card affects 30%

Equifax 

For an Equifax credit report, visit the site here. Keep in mind that all the CRBs use different FICO score models for specific industries. Mortgage lending models vary across the CRBs. Equifax typically uses FICO score model 5 and TransUnion model 4. On the other hand, Experian uses model score 2 for mortgage lending risk evaluation. 

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Therefore, your prospective mortgage lender can use different CRB that depend on different scores to size your risk level. It is much safer to have a credit fix before approaching any mortgage lender. 

TransUnion 

You can get TransUnion’s credit report here. TransUnion’s regular credit reporting is based on the VantageScore 3.0 model with a range of 300-850. Anything between 661-and 780 is good, and anything above it is an excellent credit score. 

However, what your lender is using may not necessarily be TransUnion’s scoring model applied in the report. Hence, it is vital to take all reports from the three CRBs and evaluate them carefully, periodically. 

Take Away 

Your financial and personal habits affect you in many ways that you can imagine. Credit reporting bureaus use them to determine your borrow risk levels. Your employers, lenders, suppliers etc., use it before engaging with you. 

In short, you can miss lucrative deals if you have a low credit score. Sometimes it is not even your fault but errors or CRBs using outdated information to generate reports. Therefore, it is important to check the credit report from each CRB to check for errors and outdated information. It gives you a headstart making a credit fix and protecting your credit score. 

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