Checking your credit score is an important step to take in managing your finances, especially if you are going to borrow money for a major purchase, such as a home or a car, in the near future. Your credit score can also be important for other activities, like applying for certain jobs or renting an apartment.
Experts recommend checking your credit score once a year to make sure there are no mistakes on your report that could keep you from being offered credit when you want or need it. You can check your score more than once a year if you expect to apply for credit in the near future.
It can seem confusing to check your credit score, but the process is actually not that difficult once you know what to do.
Checking Your Credit Score: Some Things to Know
The first thing to know about checking your credit score is that you actually have three credit scores. This is because there are three main credit reporting bureaus to which creditors can report information about your credit history. When you don’t pay a bill or pay down a balance on a debt, creditors may report this information to all three credit bureaus, or just to one or two.
Another important thing to know before checking your credit score is that consumers are entitled to a free credit report from each of the agencies once per year. There are a number of websites through which you can check your credit, and some of them will charge you a fee to check your credit, but Googling “free credit report” will help you find a site where you can access the free reports you are entitled to by law.
Some sources for free credit reports do not actually show your score, only the delinquencies that are on your record. Several credit card companies including Discover and Capital One are offering free credit scores to everyone, even those who are not their customers, making this another good way to access your credit score for free.
The last thing you need to know before checking your credit is how to read your score once you do get a result. There are two main ways creditors look at credit scores, and they have similar but slightly different standards.
The most common way of evaluating credit scores is called a FICO score, and a newer measure created by the three credit bureaus is called the Vantage score. The criteria both FICO and Vantage use to determine your credit score includes your history of paying debts on time, the amount you owe compared to your available credit, and to a lesser extent how long you have had credit, the amount of new credit you have, and how many different types of credit you have used.
The rankings for each are as follows:
- FICO Score
- 300-579 Very Poor
- 580-669 Fair
- 670-739 Good
- 740-799 Very Good
- 800-850 Excellent
- Vantage Score
- 300-549 Very Poor
- 550-649 Poor
- 650-699 Fair
- 700-749 Good
- 750-850 Excellent
When you find out your credit score, you can look at these rankings to determine where you fall and how potential creditors may view you as a credit risk.
As you can see, the two scoring systems have slight differences in how they rank credit scores. Another difference is that the Vantage score focuses more on your recent credit history, giving more weight to the last 24 months than FICO does. Most free ways to get your credit score use the Vantage score, but some still use FICO.
Checking Your Credit Score: Step-by-Step
1. Choose a website.
The first step in checking your credit is to choose a website. Just because a website says it gives free credit scores does not mean it is really free. Freescoreonline.com, for instance, says that it gives all three credit scores for free, but once you put your information, including address, phone number and Social Security number, it reveals that you have to sign up for a $29.95 monthly service to get your “free” scores.
There are ways to get your scores without paying $29.95, however. Different websites offer your credit score from one of the three bureaus for free, “no credit card required.” Although it will take more time, it may be worthwhile to go to three different sites instead of paying for access to your scores. Another option is to look for a site that has a free trial to their credit monitoring service or charges $1 for the first month, and use that site to check your scores, then cancel the membership to their service before your card is charged.
2. Input your information.
Once you decide on a site, you will be asked for information to confirm your identity before your credit score will be available to you. First, you will need to give your name, address, phone number and email address. Be sure to uncheck the box about receiving “special offers” if you don’t want to get frequent marketing emails from that company and any others they can sell your information to.
From there, you will be asked for all or part of your Social Security number and your birth date. Then there will be a series of questions about some of your creditors and other personal information like the name of a current or former employer.
At some point, you may be asked to create an account, even for free services. If you plan to go back to a free account again to recheck your credit, be sure to write down your username and password so you don’t forget it.
3. See your score.
After you have answered all the questions, you will get your credit score as well as some information about how it was calculated. If there are negatives affecting your credit, you will be provided with information about what they are and sometimes make suggestions about how to improve your score.
Checking your credit score may only be the first step in the process of managing your credit. If there is a mistake in your report, you can dispute it and get inaccurate negative information removed. If your credit score shows a delinquency, you can pay it off. And if high balances are negatively impacting your score, you can pay them down.