Checking your credit score is extremely important. It’s a healthy lifestyle if you want to maintain your financial fitness. Regularly checking your credit scores will allow you to pick up on any mistakes that you have been making, or even help you to detect any fraudulent activity that could impact your chances of getting credit.
Credit reports are usually compiled by three major credit reporting agencies; Equifax, Experian, and Transunion. It is important to note that there is no such thing as a universal credit score. Additionally, it is also important to note that each lender has criteria that help them decide whether you are creditworthy. Rejection by one lender does not mean you will be rejected by the other lender (s). the three reporting agencies produce their own version of your credit score and the higher the number is, the better your chances are for qualifying for better loans, better rates, and better deals in the market.
What are some factors that will affect your credit score?
Before we look at some critical factors that will affect your credit scores, note that each of the credit reporting agencies has its own scale. For instance, a score less than 560 is ‘very poor’ with Experian, but the same score is excellent with Equifax.
So, what affects your scores? How good or bad your score is entirely based on your behavior. How responsible are you with the credit facilities at your disposal? For instance, if you fail to pay your bills on time, Experian will deduct 130 points but you will gain 90 points if you use 30% or less of your credit card limits.
And just like lenders, each CRAs has its own system that helps it determine your creditworthiness. They will take a variety of factors into consideration when assigning you a score. Regardless, there are certain things that carry the same weight and will affect how all CRAs calculate your scores for example making a late payment.
How lenders report to the CRAs will also affect your score, some lenders may report the information to all the three, two or just one, or even at times none at all. Lenders and creditors sometimes will also include additional information, other than the credit scores to decide whether to grant you credit.
How To Check Your Score For Free
It is important that you understand there are different scoring models mainly, FICO and VantageScore. For VantageScore, there has been a growing number of innovative websites that have adopted the VantageScore credit model, and allow their customers to access their credit scores for free. Each of the websites is unique in its own way and the services it offers;
- American Express: American Express is enhancing American Express® MyCredit Guide, its popular credit score tool, with the addition of Score Goals, a credit score improvement tool (powered by VantageScore), using the VantageScore® 3.0 credit score.
- Creditcards.com: CreditCards.com includes a VantageScore 3.0 score from TransUnion with its basic free membership, with score updates monthly.
- Credit Karma: Credit Karma provides VantageScore 3.0 scores from TransUnion and Equifax, with weekly updates, as part of its free Credit Report Card service.
- Comparecards.com: CompareCards.com is a service of LendingTree, which provides free VantageScore 3.0 credit scores.
- Credit Sesame: CreditSesame.com provides VantageScore 3.0 scores from TransUnion as part of a free subscription service.
- Credit Wise: The CreditWise program from Capital One provides VantageScore 3.0 scores from TransUnion.
- LendingTree: LendingTree provides a VantageScore 3.0 score from TransUnion, with weekly updates, as part of its free subscription service.
- myBankrate: myBankrate includes a VantageScore 3.0 score from TransUnion with its basic free membership and updates the score every week.
- Nav: Nav provides VantageScore 3.0 scores from TransUnion and Experian, along with business credit grades from Dun & Bradstreet, Experian, and Equifax — all for free.
- Nerdwallet: NerdWallet provides VantageScore 3.0 scores from TransUnion, with updates every 7 days, and a TransUnion credit report with its free membership account. It also offers credit monitoring alerts and a credit simulator.
- Savvymoney: SavvyMoney provides VantageScore 3.0 credit scores powered by TransUnion®, updated monthly.
- WalletHub: WalletHub includes a VantageScore 3.0 score from TransUnion and a TransUnion credit report with its basic free membership and updates the score daily.
- Upturn: Upturn provides VantageScore 3.0 scores from TransUnion® as a part of its free service which also includes credit reports, credit growth recommendations, and real-time alerts.
On the other hand, for FICO Score, the first place you should go to is to your credit card issuer. Most credit card providers will provide their cardholders with free access to their credit score.
Some of the free FICO Score providers are;
- American Express
- Bank of America
- Wells Fargo
Note: in order for you to have a FICO Score, you need to be the primary account holder on a consumer card. Once you have been approved, you can view your free FICO credit score from within your online account. Assuming that you are not eligible for a credit card, it is still possible to view your credit score from;
Additionally, your credit card company and credit reporting agency will provide you with updates to your credit score every 30 days.
Furthermore, if you would like to stay on top of your credit score, tracking every change that is happening, you should consider getting a credit monitoring service. This will alert you when there are changes to your report, for instance, when there is a new inquiry or when there are new accounts that have been opened in your name.