Free Credit Scores
Under federal law, every individual is entitled to free credit reports from the three big reporting agencies at least once a year. But, until recently, your actual credit score could only be acquired for an extra fee or as part of a bonus for a subscription product.
Knowing your credit score is as important as knowing what is on your credit report. This score is used to determine your credit worthiness. Without knowing your score, you could be applying for cards that are outside your reach, which, ironically, can bring your score even lower because of excessive inquiries. At the other end of the spectrum, you could avoid applying for a better credit deal because you do not realize you would qualify.
Because of these factors, credit reporting and scoring agencies are peeling back the hood to become more forthcoming with their processes. There are a now a number of ways for you to get a peek at your credit score at no charge.
As a Perk on Your Credit Card
If you have a card from Discover or Barclaycard, check your statement. FICO has begun offering free credit scores to clients of these companies. Since FICO scores are the ones used by 90% of financial institions for credit decisions, having this information is a boon to consumers. FICO estimates that 25 million people now have free access to their credit scores through their banks.
If you do not have a card with a bank that has a deal with FICO, there are still ways to get your other scores. Credit Karma is an ad-supported credit monitoring service. In addition to credit alerts, they provide several credit scores: your TransUnion, Vantage, Car Insurance and Home Insurance Scores. The VantageScore is a cooperative effort from the three major credit reporting agencies. Credit Karma updates your scores once a week if new information is available. They also provide a graph of your credit score history. This lets you to see at a glance whether you are moving toward a goal or whether it’s time to do some fine-tuning of your financial habits.
Credit Sesame is a similar service offered by Experian. The credit score you get through them is your Experian Credit Score. This is a score that ranges between 330 and 830. The categories used are similar to the popular FICO score, but the weighting is different by a few percentage points. As a result, your Experian Score will not be exactly the same as your FICO score. However, it can give you a ballpark idea of how you score with FICO. CreditSesame updates your score once a month.
Monitoring your scores on a regular basis can keep you motivated. As you work toward a credit score that allows you to achieve your home ownership dreams, check your scores regularly and watch them rise.