Hello and welcome to our blog! Today, we’re diving into an important topic: “How to Check Your Credit Score for Free?”.
Credit score is a key number which affects your financial life greatly. Beginning from the ability to borrow money for business or personal use, get an apartment of one’s choice or even the rate to be charged on the credit card that is applied for, the credit score is immensely significant. However, there are a few questions that one would like to answer, for instance, how can one check his or her credit score for free? Read this complete guide on how to use the different methods to check this number for free and maintain financial health.
What is a Credit Score?
To introduce the methods of how to get your credit score without having to pay for it, let’s define what credit score is. Credit score is a numerical value represented by three digits which indicate how credit worthy a person is. It depends on your credit history which includes the record of payment, ratio of credit used to the actual credit limits, the years for which the credit has been held, numerous types of accounts you hold, and the number of accounts on which enquiries have been made.
This means that there are two main types of credit scores – FICO Score and VantageScore and both of them are calculated depending on the information entered within the range of 300 to 850. Typically, the higher the value achieved the better creditworthiness of the borrower is.
Why is Your Credit Score Important?
Your credit score affects many aspects of your financial life:
- Loan Approvals: Your credit score helps the lenders decide whether to give you credit or not and what type of credit such as a loan or credit card.
- Interest Rates: A good credit score will grant you lower interest rates thus proving useful in the long run because they reduce the amount of money you have to spend on interest rates.
- Renting an Apartment: Some landlords ask for your credit report so that he or she may determine your worthiness as a tenant.
- Job Opportunities: Credit checks also may be run on you by employers, and especially when it relates to a job with a finance component.
How to Check Your Credit Score for Free
Free Credit Monitoring Services
Credit Karma: Credit Karma is arguably one of the best services that allow using credit monitoring for free. It offers its customer weekly updated TransUnion and Equifax credit score known as VantageScore absolutely for free. Credit Karma also include credit profile details and notifications on any credit update in your credit report.
Credit Sesame: In a very similar vein to Credit Karma, SESAME CREDIT directly offers the user’s TransUnion credit score to look at for free while giving them a plan of how to manage their credit. This also forms part of the Offer which covers the identity theft protection for up to $50 000.
WalletHub: These credit scores are provided to you free of charge at daily basis by WalletHub and measures TransUnion VantageScore. Of course, it also offers tailored suggestions as to how one can increase one’s credit rating and general financial wellness.
Credit card issuers For most of the credit card issuers, offering free credit score is one of the additional services for their clients. Some of the major credit card issuers offering this service include:
Discover: Here, it need be mentioned that Discover cardholders are enabled free access to FICO Score, which is updated on monthly basis. Other consumers are also free to go to Discover’s website where they can register to access their FICO Score for free if they are not discover card holders.
Capital One: Capital One also include free credit monitoring service known as CreditWise which allows you to monitor your TransUnion VantageScore report on weekly basis regardless of your status as the cardholder.
American Express: This is good news for cardholders who can obtain their free FICO Score through the Amex website or Amex app.
Free Annual Credit Reports According to the FCRA, you are allowed to obtain one credit report from the three major credit bureaus namely Equifax, Experian, and TransUnion within a year. For these reports you have to go to AnnualCreditReport.com. These reports do not contain your credit score but they contain histories of your borrowing activities used in arriving at your score.
Financial Institutions and Banks Some of credit union and banks have free credit score services for their users. For example:
Chase: Chase credit journey is a program through which Chase customers can be able to get free credit score from TransUnion.
Bank of America: Through bank’s online banking service offering, Bank of America offers its customers free access to their FICO Score.
Wells Fargo: Any Wells Fargo client can obtain his or her FICO Score without charge through Wells Fargo’s website.
Equifax or Free FICO Score Equifax, also offers a free credit report via the website complete with FICO score in exchange for becoming a member of credit monitoring services offered by Equifax. The service also provides notification about any changes to the credit report and ways that the client can raise his credit rating.
How to Use Your Free Credit Score
With your free credit score in hand, you will only need to consider ways on how to fully benefit from this. Here are some steps you can take:
Monitor Regularly: This is because you can be able to keep track of your financial status through the credit score report and also be able to feel when there is an act of identity theft.
Review Your Credit Reports: Besides, get a credit report from the three major credit bureaus to see for yourself their rating on you. Search for any mistakes which may reduce score and any inconsistencies between your document and original application.
Understand Factors Affecting Your Score: Know what determines the credit score including, payment duration, credit card balance, and credit history age respectively. That is why it is crucial to put more effort in these areas to increase the score.
Dispute Errors: In case you notice that there is an error you need to correct then you should dispute the same with the credit bureau. The good news is that, correcting such mistakes are able to enhance your score.
Build Good Credit Habits: Some of these include; timely payment of bills, balancing the credit card limits, and avoiding to open several accounts of credit in a short span.
Common Misconceptions About Free Credit Scores
Free Credit Scores Are Less Accurate: There has been a question on whether free credit scores are accurate as the paid ones or not. However, most ‘free’ credit scores are from the credit bureaus, or calculated using similar models which lenders utilize.
Checking Your Score Lowers It: Using any of the free services to check your credit score is done through a ‘soft search’ and thus has no impact on the credit score.
You Only Have One Credit Score: Credit scores can differ by the type of the model used – FICO or VantageScore or by credit bureau that has provided the score.
Conclusion
That brings us to the understanding of one’s credit score, which is a very important component in one’s credit status. Considering the vast amount of free information available now, there isn’t a single reasonable why one would not want to know its credit score. Whether you use the credit monitoring service, credit card company, bank or through the annual free credit report website you can readily obtain your credit score freely. It is therefore important that credit scores are checked and the factors that determine it be understood so that the person can change his/her financial destiny for the better.
By using the mentioned free help and staying away from negative credit behaviors, one would be in a good position to have a good credit standing hence a good credit rating which will enable him/her qualify for better terms in his/her financing needs. You should start assessing your credit score today and move to a better financial position for your future.
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