Every credit card, loan, credit from bank or store you have ever gotten, from that first credit card you got in school to the first car loan, all those student loans, to buying your house has been building your credit. All those on time payments and payment in full keeps your accounts in good standing which in turn raises your credit score. You have to check your credit report to know what your score is and what affects it.
You have a Credit Score … Now What
That car that got you through college and your early career is on its last wheel, so you go out looking for a new car for the family. You were able to get your home a few years ago, but have had some credit card issues but you think that you should be ok. When you do the paperwork for financing you find out that your application was rejected based on your credit score. How could this happen?
Every payment you make or don’t make, run late on changes your credit score. You can keep track of the effects of all of this by regularly checking your credit score. The recommendation is to check your credit score at least once a year, but if there are multiple purchases you are planning or you had some trouble and are trying to get back on track, definitely check into more often.
How to Check Your Credit Score
There are many ways to check your score both those that charge a fee and those that are free, but you want to know a few things before just jumping in. There are three major credit bureaus in the U.S. and they are TransUnion, Equifax, and Experian. These score look at similar factors however the formulas used to achieve your credit score weight the factors differently so the three scores will likely be slightly different. Also if you check your credit score and find something that doesn’t look right you can contact the bureau to get it corrected or removed.
Where to Check your Credit Score
There are a variety of websites that will provide you with your credit score from one or more of the bureaus at different intervals. Credit cards are starting to include access to reports or updated scores on monthly statements for cardholders to improve utilization of credit.
- AnnualCreditReport.com – allows one free credit report from each of the three bureaus each year, so you can get all three at the same time or get one at a time and spread them out throughout the year to get a more comprehensive view of your credit health.
- CreditKarma.com – allows you to see two of the three bureau credit scores on demand with score reports being updated each month. This site also provides education on how to manage debt and improve credit score, as well as providing opportunities to obtain new credit sources to improve credit score if used appropriately.
- Credit.com – allows free access to credit reports each month.
Some of the sites will also allow for on demand credit score updates, so that when you are ready to go looking for that new car or home, you know what you’re working with. Checking your credit score monthly can give you better perspective on your financial health and how to improve your score or maintain a high credit score so you can live your life and buy what you want when you want it.
Credit card companies are starting to include your FICO score on monthly billing statements. Your FICO score is a score using a software program that rate credit risk and is becoming a fixture in the credit world. Receiving your FICO score provides one more piece of information that completes the picture of your credit health.
Outside of the sites that allow you to check your own credit score, there are certain circumstances that entitle you to receive your credit report. Any time an application for credit is denied you have 60 days to submit a request to receive the report the denial was based on, also if you are searching for employment, denied an application for insurance for employment or on welfare you are entitled to receive a copy of your credit report.
[Read: How to Raise Your Credit Score]
The Last Word
Before you fill out any paperwork for an application for credit whether it be for a car, house, store credit card, student loans, take the time and use the information provided to you by this increased access to credit scores to know what you are working with. Look at your credit report to see if there are and errors and get those errors corrected before applying for credit. Taking these steps will set you up for the best chance of getting approved, no matter what you are getting credit to buy.