Your credit score is arguably the most important number in your financial life, and these days it’s easier to check than ever.
Before you apply for a new credit card, personal loan, or mortgage, it’s important to know your score, since it will give you insight into what products you may qualify for and what interest rates to expect.
Checking your credit score doesn’t hurt your credit, and even if you’re not applying for credit, it’s smart to get into the habit of checking it regularly.
In fact, the simple act of checking your credit score is one way you can improve your credit. If you notice a dip in your score, it may alert you to potential fraud or errors on your report. Checking your score monthly may help you catch issues early and get a head start on resolving them.
What is a credit score ?
A credit score is a three-digit number, typically ranging from 300 to 850, that is the result of an analysis of your credit file. That magic number tells lenders your potential credit risk and ability to repay loans. Credit scores consider various factors, such as payment history and length of credit history, from your current and past credit accounts (more on that below).
The Importance of Knowing Your Score
By logging on to AnnualCreditReport.com, you can check your credit reports for free once every 12 months from each of the major credit bureaus—Equifax, Experian, and TransUnion. However, these reports will not give you a credit score. While you can pay one of the reporting companies for your credit score, you really don't have to anymore. There are a number of websites and credit card companies that will give you your credit score for free.
Here are four free services and five credit card companies that provide credit scores to consumers, along with what each of them offers and how they differ.
How are credit scores calculated?
Credit scores are calculated differently depending on the credit scoring model. Here are the key factors FICO and VantageScore consider.
FICO Score
1. Payment history (35%): Whether you’ve paid past credit accounts on time
2. Amounts owed (30%): The total amount of credit and loans you’re using compared to your total credit limit, also known as your utilization rate
3. Length of credit history (15%): The length of time you’ve had credit
4. New credit (10%): How often you apply for and open new accounts
5. Credit mix (10%): The variety of credit products you have, including credit cards, installment loans, finance company accounts, mortgage loans, and so on
Free credit score resources
Most credit card issuers provide free credit score access to their cardholders making it easier than ever to check and know your score.
Some issuers, such as Citi and Discover, provide free FICO Scores, while others, such as Chase and Capital One, provide free VantageScores.
You can check your credit score in less than five minutes by logging into your credit card issuer’s site or a free credit score service and navigating to the credit score section. There will typically be a dashboard listing your score and the factors that influence it.
FICO and VantageScore will pull your credit score from one of the three major credit bureaus, Experian, Equifax, or TransUnion.
Here are some free credit score resources that you can access, whether you’re a cardholder or not:
• CreditWise from Capital One: Free VantageScore from TransUnion
• Chase Credit Journey: Free VantageScore from TransUnion
• Discover Credit Scorecard: Free FICO Score from Experian
These resources also provide insight into the key factors affecting your credit score, simulators on how certain actions may affect your credit, and helpful tips for improving your credit score.
At Credit Repair Ease, we appreciate that is easy to get overwhelmed by all the talk about credit scores. Our team works have simplified things by providing insightful resources to help you out. We have made it easier to access your credit report, review the report, monitor your credit report, and improve your credit score. We have decades of experience in the industry and over the years, we have become the go-to people for a quick understanding of credit scores in USA.
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