How to check your credit score
Your credit score is the most vital aspect of your financial future, as it influences your ability to finance major purchases. And that determines how much you will pay for them in interest charges. Plus, everyone wants to check your credit: potential lenders, mortgage companies, apartment managers, employers, insurance agencies — even potential spouses.
Knowing your credit score helps you see what potential lenders are seeing. This way, you have a realistic idea of the type of finance product you qualify for and if now is a good time to finance higher-priced items.
Option 1: Open a credit card that offers credit score monitoring
Many credit card companies now offer credit score reports in their toolbox. Capital One’s CreditWise keeps you up to date with your VantageScore assigned by TransUnion – one of three credit bureaus that maintains reports on your financial behaviors. Discover also gives you access to check your FICO score for free.
In the meantime, you are in luck if you establish or rebuild your credit. You can get a secured credit card from many lenders that offer these monitoring services, such as Capital One and Discover. How it works is you make a deposit which becomes your credit limit. And when you open one, you get access to these monitoring tools.
Also: 5 ways to improve your credit score without a credit card
Other credit card companies offering similar benefits include Bank of America, US Bank, Citi, Wells Fargo, Barclay, and American Express.
Option 2: Let your bank do the work for you
Some banks offer their customers access to their credit scores. For example, Chase has a program called Credit Journey. Once registered, you can receive your VantageScore for free. Another option is to check with your credit union. Some will offer you a free credit score update as part of their services.
Option 3: Opt for a credit monitoring program
Credit Karma is beneficial because you receive free credit scores from Equifax and TransUnion, with updates every seven days. Besides being a free service, you’ll get a dashboard of your credit scores, showing the behaviors that contribute to your score. And you will also get information on what you can do better to improve your score. Since your scores come directly from two credit bureaus, you can be sure they provide perspective on how potential lenders view your situation.
Another option is Credit Sesame, which is also a free service to use. You will receive your VantageScore from TransUnion with daily updates. They also provide transaction alerts, allowing you to determine the validity of information entered into your TransUnion credit report. And if that information is inaccurate, you can challenge it before it does more harm. Another handy feature is credit offers and approval ratings.
You can also use a service like myFico. myFico gives you access to your Equifax credit score with monthly updates. Plus, a paid subscription unlocks tri-bureau credit scores and FICO score versions for mortgages and auto loans. So if you’re in a position to buy a home or a vehicle soon, paid membership helps you know where you stand before you apply to potential lenders.
How do I check my credit score?
You can use any of these services listed above to help you access your credit score. If you have a credit card, you can sign up for their monitoring service by logging into your account and searching for account tools. Some lenders like Discover automatically show your FICO score on your statements.
Meanwhile, credit monitoring services often need your name, address, and the last four digits of your social security number. Since you are entering your personal information, try to use a private connection when setting up and accessing your account. Public Wi-Fi makes it easy for your information to be compromised.
Who determines my credit rating?
There are three credit bureaus: Experian, Equifax and TransUnion, which generate credit reports.
What factors influence my credit scores?
Your payment history, balances due, length of your credit history, new credit, and credit mix all influence your credit score. For the credit mix, that means you could have a car loan (installment) and multiple credit cards (revolving). Lenders like to see a combination of credit accounts because it shows them that you can manage different types of debt responsibly.
What is the difference between credit scores?
The two most commonly used credit score lenders are FICO and VantageScore; both use information from the three credit bureaus to calculate scores. However, there are several differences between them. With FICO, you’ll need at least a six-month open credit account before you create your score. With VantageScore, you will receive a score after opening a line of credit, with no minimum time required to generate scores.
Another difference lies in the criteria measured to determine the score. With FICO, your payment history is responsible for 35% of your score, while 30% is made up of balances owing on your accounts. Comparatively, VantageScore places greater emphasis on credit usage, balances, and how much free credit you have on your revolving lines. Let’s say you have a credit card with a limit of $1,000; if your balance is $900, this will drop your score since you are using most of your line of credit.
By combining all factors, FICO assigns a score ranging from a low of 300 to a high of 850. VantageScore uses the same scoring range as FICO.
Why is my credit rating different when applying for a car loan?
When you apply for an auto loan, lenders look at your auto credit score. It’s like your FICO score, but it puts a heavy emphasis on your previous car loans or leases. If you’ve made all your payments on time, you may find that your automatic credit score is higher than expected. Conversely, if you’ve had difficulty paying car loans in the past, it could mean a lower score when you apply this time around.
Will checking my credit score hurt my credit?
No, because you are not carrying out a serious investigation. Monitoring services typically use a soft query to access your credit scores. That means they get the information they need, but there’s no residue on your credit reports.
Why should I check my credit scores regularly?
Checking your credit scores allows you to stay in control of your finances. If you notice a change, you can investigate it and not be surprised if you need to apply for funding. Plus, if there’s fraud, it’s a quick way to spot it and act before the damage snowballs.