Free Credit Score

Every lender wants to ensure that the borrower they lend money to will pay it back on time and with all the interest shown. But how can an unfamiliar investor or financial institution know that you are a reliable borrower? 

To give loans quickly and not waste time collecting information about you, lenders use credit scores as one of the most critical indicators when deciding on loans. A credit score is a number between 300 and 850 that shows how responsible a borrower you are. By looking at it, lenders determine the loan terms, repayment period, and interest rate specifically for each person who applies. 

Every financial institution has different credit score requirements, some of which do hard credit checks, lowering your credit scores. This is why you should check your credit report regularly and try to improve this key indicator.   

Can it be done for free? Of course, it is! We will tell you more about this in our article. 

Why Should you Check Credit Score? 

As we said before, credit scores and credit report are two of the most important things lenders look at before lending you money. They may not check your income or formal employment, but they will look at your credit report and all its marks. 

However, if this parameter is created for lenders, why should you check it regularly?  

  • First, the data on your paid or free credit reports does not appear automatically. Every month, creditors report to three major credit bureaus, and sometimes they make mistakes that become negative marks on your reports. You will only know about the result of a lower credit score if you check it regularly. 
  • Secondly, checking your credit report will help you understand that you are not a victim of fraud. We often unknowingly give strangers information they can use to get credit in our name. The credit check will show up on your credit report, and you can take action to make sure your credit history is not affected. 
  • Third, you need to see the situation on your credit report to improve your credit scores and get better loan offers. 

Even your potential employers or landlords may ask for your credit report to learn more about you, so you should study the information on it well and respond quickly if negative marks or errors appear there. 

What Info is Covered in Credit Report? 

Your credit report is only available to some, but only to a limited number of people and organizations that must be authorized to obtain information from it. It contains personal information, including your date of birth, current and previous addresses, telephone numbers, credit accounts, and payment history. 

In general, information from a credit report can be categorized as follows: 

  • Personal Information. 

This includes your first and last name, date of birth, employment, Social security number, and any credit accounts and phone numbers you have used. 

  • Accounts. 

All credit accounts and loans, including credit cards and mortgages used in the last 7-10 years, are on your credit report. It also lists the opening and closing dates of each account, your credit limit, and your balances.   

  • Payment history. 

Throughout your life, you make hundreds of payments, most of which are kept on your credit report as long as they are current. So, for example, you can find your rental leases or utility accounts in them, and you can see a list of the companies that have asked for your credit report and the dates they read it. 

  • Public records. 

If you have ever received bankruptcies, foreclosures, civil suits, and judgments, your credit report will include marks about them. Moreover, these are the type of marks that are unrealistic to remove, even by disputing them with credit bureaus. 

However, not all information about you appears on your credit report, so lenders usually ask for additional information when you submit your loan application. For example, it doesn't include details about your education, marital status, income level, or bank account. 

How to Check Your Credit Score

There are many ways to check your free credit score. To make it easier for you, we'll describe the most accessible three options: 

  • Visit the free credit scoring website. 

Many lenders and financial education platforms provide a free credit monitoring service to attract as many clients as possible. You can take advantage of this option and get your credit report information through them utterly free of charge. For example, sites like CreditKarma, Experian, or AnnualCreditReport allow you to receive a copy of your free credit report once for a certain period (usually 2 to 12 months). 

All you need to do to check your free credit score on these websites is to register and verify your identity. 

  • Look in the app or on the website of your card provider. 

Many banks and credit card companies offer their cardholders the opportunity to check their credit score for free using financial tools. But unfortunately, they usually only show the number of points and recent events in your credit history that may have led to changes in your credit score. 

  • Ask for free credit monitoring services from specialist agencies and organizations. 

Many nonprofit credit counselors who help clients improve their credit provide access to free credit reports and other tools to monitor changes in their credit scores. 

If none of the above options works for you, you can request one free credit report per year from each of the three major credit bureaus.  

Credit Score Ranges

Now you know how to check your free credit score, but how do you know what it means? To do this, you need to know the value of all the score ranges. For example, the national average FICO score is 711, but many people have lower scores. FICO scores generally fall into the following fields: 

  • If you have between 300 and 579 points, you have poor credit. It will not allow you to get favorable loan terms, and many lenders will only agree to lend you money if you provide collateral. 
  • A fair credit score between 580 and 669 points is also considered one of the worst options for people who want to get a loan. Even though many financial institutions work specifically with this type of borrower, getting a loan on favorable terms is still tricky.
  • The average U.S. credit score is 711 and falls into a good range (670 to 739 points). People with this score find it easier to get credit on better terms, and they can also qualify for credit cards with a lower APR. 
  • A very Good credit score (740 to 799 points) shows the lender that you are a reliable borrower and will pay the money back on time. This rating is the best option for those who want a 0% APR credit card or low-interest home loan. 
  • An exceptional credit score (800 to 850 points) is the rarest of all the above. At the same time, it allows you to get an excellent loan for any purpose, including business creation and development, and generally receive the most competitive interest rates.

Remember that your credit score is variable. If you are unhappy with your credit level now, you can constantly improve the factors that affect it. 

Credit Score Factors

As you know, there are several models used in America to calculate credit scores. However, 90% of lenders use the FICO model, so we will use it as an example to look at the factors that affect credit. 

So, what goes into your FICO scores? 

  • Payment history. 

Payment history is the essential indicator responsible for 35% of your final score. It shows whether you pay your loans on time, miss utility bills, or make other payments. Remember that even one late payment can hurt your credit score, so make all your payments on time. 

  • Amount owed. 

Another 30% of your credit score is the ratio of your debts to your total available limit. So, for example, you can have many credit accounts but borrow no more than 10% of your total available limit - and lenders like that. And if you have only one or two open credit cards but use the entire available limit, that's a negative marker for lenders. 

  • Length of credit history. 

The longer you use credit and credit cards, the better it affects your credit score. However, even though 15% of your FICO Scores are the length of your credit history, you can have good credit even without it. 

  • Credit mix. 

Many borrowers think it is worth using as many different types of credit as possible to improve their score by 10%, for which the credit mix is responsible. However, this is not the case; you only need two or three different types of credit (e.g., credit card, personal loan, and home equity loan) to affect your final credit score positively. 

  • New credit. 

Another 10% of your credit score is no recent credit cards or loans obtained. Lenders are very wary when they see that a borrower has recently received or requested credit from another company, as they think that something has happened in their life and that they are in a difficult financial situation in which they will not be able to repay borrowed funds on time. 

It's important to understand that FICO Scores are unique, and it's impossible to calculate which factor impacts your credit history accurately. Your credit report is updated monthly, so try to do at least 1-2 things each month that will get you closer to an Excellent credit score. 

How Often Should You Check Credit Score?

Your credit report stores all the information about your credit accounts for the last 7-10 years, and some marks can only be removed if you pay attention to them in time. That said, as you know, creditors sometimes file erroneous information with the credit bureaus, and scammers can take advantage of your records or other ways to get credit. 

You need to review your free credit report regularly to know about it. To avoid such problems and be aware of your credit score, you should check your credit report at least once a year or all three credit reports from different bureaus. 

However, there are situations where you need to check the information in the report more often than once a year: 

  • If your score has plummeted, ask for a copy of your credit report and find out why. Maybe the lender misstated your balances, you missed a payment on some loan, or scammers lent money in your name. 
  • To improve your score, you should review your free credit report every 2-3 months to notice your progress. It is also essential to do this if you have contacted credit report agencies. 

Remember that checking your credit report does not affect your credit but only gives you information about your current state of affairs. Also, review reports from all three bureaus, as some lenders only report to one of them, and your credit scores may differ drastically because of this. 

Credit Score vs. Credit Report 

Sometimes, credit score and credit report seem to be the same things necessary to understand your borrower's reliability. However, there is a difference between the two, and it lies in the following items: 

  • A credit score is a single number from 300 to 850 points that summarizes your credit situation. At the same time, a credit report is a more detailed information. The credit score represents everything written in the report in one number. 
  • Your credit reports collects all the information about your credit activity over the past 7-10 years. You can find all the data about your credit and how your credit score has changed at different times. At the same time, the score does not show information about your past but indicates your present situation. 

Despite this difference, your credit score and credit report affect the lenders' decision to grant credit. They are closely related, so you should check both of them regularly. 

Three Major Credit Bureaus

There are three main bureaus in America, called credit reporting agencies: Equifax (the most popular one), Experian, and TransUnion. Each agency operates independently of the other and collects information about borrowers to compile a credit report. 

Credit bureaus do not have automatic access to everything that happens at banks and financial institutions. Instead, lenders, credit card issuers, and debt collectors submit information about borrowers to one, two, or all three bureaus. As you understand, you may have several different credit scores, as not all creditors report to all bureaus. 

In addition to creating paid or free credit reports, these organizations are also involved in communicating with borrowers who have found errors or inaccurate information in their paperwork. Sometimes, lenders make mistakes when they submit information to the bureaus, which can cause some borrowers' credit ratings to drop. However, don't worry, if you find yourself in this situation, you will be able to correct all the mistakes, and the credit reporting company will remove the mark from your credit report. 

Why can Credit Scores Checks Results be Different? 

If you have already started checking your credit scores regularly, you may have noticed that they are constantly different. Why is that? We have found five main reasons: 

  • Different organizations use different scoring models. For example, lenders use FICO scores 90% of the time, but some prefer VantageScore.
  • You can look at different score versions. Now you know that dozens of other FICO scores are used for various purposes in different industries.  
  • You are looking at reports from different bureaus. As we said before, not all lenders submit information to all three credit bureaus, so your credit scores may also differ. 
  • You are comparing free credit reports for different months. Because your credit report is updated once a month, so your score may also vary. 
  • Errors or negative marks appeared on your credit reports and caused your credit score to plummet. 

If you can't figure it out and want to seek professional help, you can go to a credit counselor who will explain the difference between all your credit scores and tell you when to use them. 

What can Hurt Credit Score 

If you know what's hurting your credit rating, you can change or remove and improve those factors. Unfortunately, as we've learned, the most common reason your score drops is because of the following: 

  • Bankruptcy. This negative score will cost you 130-240 points and remain in it for ten years, which is the most significant negative credit score impact.  
  • Foreclosure. Such a credit report negative information will also take away a lot of points at one time, about 160, and will remain on the report for seven years. 
  • Debt settlement. If you decide to pay off all your debts with one new loan, your credit may drop by 45-125 points. However, remember that this is a temporary effect, and if you pay off your new loan on time, you will see the positive impact of such a decision in 1-2 years. 
  • Late payment. Since payment history shows 35% of your credit rating, even one payment late by more than 30 days (sometimes 60 days) can take away up to 100 points. 
  • Collections. If the creditor has referred your debt to debt collectors, they will send information about this to the credit bureau, and your score may drop by 100-150 points. This negative score will also remain on your report for seven years. 
  • Using up all of your available credit limits. Since 30% of your score is credit utilization, the more money you use from your available limit, the lower your credit score drops.
  • Hard inquiries. If you apply for a loan from a financial institution, they may make a hard inquiry and ask for complete information from your credit reports. If this happens, you could lose 5 to 15 points. 
  • Big Loan. Your score will drop a bit if you have a home loan, student loan, or just a significant personal loan because of increased credit utilization and recent inquiries. 
  • Credit report errors. Negative marks on your credit reports cause a sharp drop in your score, so try to check it regularly and resolve all the errors on time. 

How to Build your Credit Score 

To build good credit, you must address this issue regularly and change your financial habits. Below we have listed many possible options to help you improve your score quickly and easily: 

  • Contact a credit counselor. 

Very often, the large number of debts and various loans prevent us from knowing which is worth repaying first to save money. Professionals will help you escape this confusing situation, and you can contact them for free for an initial consultation. 

  • Only use some of your available credit limits. 

It's best to stick to the 30% rule when you don't use more than a third of your available credit. 

  • Always pay your loans on time. 

Even one late payment can cost you 100 points.

  • Ask your credit card issuers to increase your credit limit. 

This will help you lower your credit utilization and increase your score as early as next month. 

  • Dispute credit report errors. 

Each negative mark on your credit reports averages -100 points for your score. You can contact a credit repair agency or dispute these errors to have them removed from your credit reports in 6 to 12 months. 

  • Use secured loans or credit cards. 

Lenders rarely agree to give you unsecured loans if you have terrible credit. However, you need to get at least some credit so lenders will file information about you as a reliable borrower with the bureaus. In this situation, it is best to use secured loans. 

How Credit Score affects the mortgage rate 

In general, your score significantly impacts the credit terms you can take advantage of. For example, if you have excellent credit, almost every lender will be willing to lend you money at a low APR, and if you have poor credit, few financial institutions will be ready to work with you. 

We can look at how a credit score affects your credit terms with an example of mortgage interest rates and fees. According to research conducted by FICO and Experian, people with a score above 760 have a 2.5% APR available, and borrowers with less than 640 have a 4.5% APR available. 

Let's calculate how much that is in dollars. For example, if you borrow $400,000 from the bank for 30 years: 

  • With good credit. In this case, your monthly payment will be $1944, and you will pay back $700,000 over 30 years.
  • With bad credit. In that case, your monthly payment will be $2611, and you'll pay back a total of $940,000 over 30 years. 

If you want to get good deals on loans, you should work on improving your credit score. All such activities will pay off for you several times over.

Want to get as low interest rate as possible? Then, it’s crucial to watch your report. 

According to the survey conducted among 1,108 Americans, about 4 in 10 Americans have no idea of what a credit report is and how it is determined.

Shocking, yet, sad reality. The fact that everyone can get a free credit report makes it even worse. Used for more reasons than you can even realize, credit risk evaluation can save you thousands of dollars over time.

So, what is a credit report?

credit report definition

Once you decide to get a free credit score report, there are some things to consider. You have two possible ways to go. First, you can sign up for a free trial and once it is on your hands, cancel the trial. The truth is this option isn’t recommended just because keeping tabs on your data is always great. Second, the top three credit bureaus will do it for free. Yet, get ready for some gaps in it. Anyway, it can do help you in a tough spot.

How often can I get my free report?

Well, the ‘Big Three’ bureaus can give you one report for free per year. Think of getting an annual credit report only from one of the bureaus? Bad choice. It is not the smartest way to watch for changes. It’s also wise to stake out errors and identity theft. Just because no one is guaranteed an error-free report, regular checks can save you time.

“Reviewing only one of your three credit reports is like locking one of the three doors to your house.”

John Ulzheimer, an ex-credit expert from Equifax Credit Information Services and FICO

Credit Report vs Credit Score

Even though credit score and credit report sound the same, don’t mistake. Your three-digit number is a reflection of your report. It’s calculated in numbers to estimate the level of risk involved in lending you money. The higher the number, the bigger your chance to get a lower interest. The lower the number, the higher the chance that your financial capacity is poor.

In turn, a report compiles your credit history. We all love a good comeback story, right? But the reality is not always favorable. Things like bankruptcy or unpaid debt happens. Sometimes more often than we want. Remember that’s all included in your report


How to Choose the Best Credit Report Site

If you’ve never tried to get a free annual credit report from the Big Three, it’s time to get started. Once you learn the rules of the top credit report agencies, it’s easy to stay on top of the heap. 

Thus, you’ll know how to pick the one that fits you best. Also, keep in mind that the method of data collection for each company varies. Even though the difference is not big, it’s important to know what shows up on one and might not on the other.

Requesting a copy of your report by all Big Three is smart. Just fill out the Annual Credit Report Request Form

Why review my annual credit report on a regular basis?

Well, things happen. If you want to avoid unpleasant surprises the next time you apply for a loan, make sure your data is in tip-top shape. The only way to do that is to review it regularly.

The full copy includes detailed information on every line of credit you’ve had. Whether it’s balances, limits, or payment history, get ready to see it all there. Check it carefully for errors. Once inaccuracy occurs, dispute it as soon as possible. This is the only way to correct incomplete information.

Below is a detailed review of each of the Big Three companies. Just like with any product or service that exists today, there’s no silver bullet.

Experian Credit Report 

Used commonly by lenders, Experian is one of the Three Big agencies out there. It operates in 37 countries and allows you to get your report for free. It all started with a group of London tailors who began sharing information about customers who failed to settle their debts. Today, Experian keeps data on some 235 million consumers and 25 million U.S. businesses.

To get Experian free credit report, you need to sign up for its 30-days free trial. During this period, the service offers to watch out your credit and get a dark web surveillance report. In addition, you can get access to both your report and your score but for a fee. If you want to see your report only, you can refresh it for yourself every 30 days.

TransUnion Credit Report 

TransUnion is one of the smallest and newest agencies that comes with a rich 49-year history. It profiles just about every credit-active consumer in the U.S. Thus, it offers you to get a TransUnion free credit report and a wide range of fraud prevention services.

Would you like to do more than mere access to your credit history? Then get ready to pay for it. It breaks down your history by account, giving you details like the amount of the loan, your monthly payment, and whether or not you’ve made those payments on time. In case of any suspicious activity, like applying for your credit card in your name, you’ll get an instant alert. 

Equifax Credit Report 

Started by two brothers in the late 1800s, Equifax has become the first choice for lenders in the U.S. Unlike Experian founders, Equifax started its work by compiling a list of customers who were good payers. Today Equifax is one of the leaders on the market with a workforce of about 14,000 employers throughout 19 countries. 

To get an Equifax free credit report, sign up to a 30-day free trial. Aside from that, you’ll get access to weekly email alerts whenever there are changes to your account. After the trial period, cancel your subscription. Otherwise, you’ll pay fees. What is the number one priority for Equifax? Indeed, your payment history. Also, the company considers the type of credit you applied for. 

As you can see, to get a full picture of your financial capacity is easy. 

Besides, you can get a 3-in-1 credit report at some companies. This 3-bureau report compiles the data from all three agencies on a monthly basis. Also, when something new, no matter whether bad or good, happens, you get an alert.

How to Get a Free Credit Report Online

If you’re looking at how to get a free report, keep on reading. First, you’re limited in options. You can opt for a free yearly credit report. Second, you may order one, two or all three at the same time. 

Want to review your credit every month?

Request the option from reporting companies like CreditKarma, Clark Howard, and the like.

Credit Karma 

The agency partners closely with the TransUnion bureau. Aside from getting a Credit Karma credit report, enjoy a pack of other services to try. Important to note that you get data from two bureaus. Experian’s data is the exception. Want to learn what credit card and loan offers you may apply for? Learn it aside from getting a Credit Karma free credit report. You can also compare credits, simulate credit scores, and use calculator services. 

User-friendly and robust, CreditKarma report is one of the top picks. Want to see how your score would be affected in the near future? Use a credit score simulator. Have some doubts? Seek advice from an active community forum members.

Innovis 

Innovis is another reporting agency you can try. Among the personal services, credit reporting is of top priority. Thus, consumers can request a copy of their Innovis credit report by phone, mail or online. The report includes personal and account information. Aside from that, there’s nothing to stop you from trying other monitoring tools.

Chase 

To get your free Chase credit report, create a personal account by visiting its website. You can also use the Chase mobile app to make this happen. As a result, you can keep tabs on your score on a daily basis. In fact, a great option for those who’re concerned about their identity being stolen. 

As such, Chase allows you to review your VantageScore from TransUnion for free. As a bonus, get free notifications in case of any changes to your credit. 

Discover 

Have you tried Discover service? If not, you may not even be a company’s customer to get your Discover credit report. It provides you with a free FICO score derived from Equifax. It’s worth mentioning that your FICO score from Discover might not be the same score that your creditors are using. Yet, it’s still worth a look.

Capital One 

You can stay on top of your finances by taking advantage of your Capital One credit report for free. It’s available to everyone, even if you’re not a Capital One customer. As a result, you keep tabs on your TransUnion report and VantageScore number. The best thing is that you can refresh your data weekly. Also, there’s no trial period, so it’s 100 percent free service. At last, checking your data won’t affect your score.

Clark Howard 

Clark Howard is the company not to be missed. A Clark Howard free credit report is one that is checked and monitored frequently. 


Credit Sesame vs Credit Karma

Both CreditKarma and CreditSesame stay top of the most popular options. As such, tools, tips and products they offer are very similar. Both services are safe to use, take steps to protect your data, and offer apps that are easy to use on your phone. 

Along with free credit reporting, both agencies offer a wide array of other services. Yet, there is a difference between the two. In times where CreditKarma.com shows TransUnion and Equifax; CreditSesame.com just shows TransUnion. Want to get a more detailed credit score simulator and access to more financial services? Go for CreditKarma.com. For those who prefer to get an overall view of your financial data on the dashboard, CreditSesame.com is the best opt. 


What Is the Best Site to Get a Free Credit Report?

No matter your race, status or belief, checking the information on your credit report is a must. Still, wonder how to check reports for free? The reality is that your opportunities to order a credit report for free are almost endless. Thanks to the credit agencies that do the dirty work for you, keeping tabs on your financial health becomes a smooth track.

Is annual credit report safe? Well, it is not only a safe but also a trustworthy way of obtaining the relevant information. To ensure that the data is accurate and true, go for the best free credit report site first. Do the research and focus on what matters to you most. As a result, you’ll be able to find a solution that fits the bill.

FAQ

Can checking my credit score hurt my credit?

If you check your credit report yourself, it will not affect your credit rating. However, it may only drop if financial institutions do a hard credit check before lending you money.

Is it really free to check my credit scores?

You can use one of a dozen ways to check your credit report for free. You can do this by visiting particular monitoring websites, contacting the credit reporting agencies themselves, or looking in your credit card company app - it may have the tools you need to do this.

How can I check my credit score without ruining it?

You can check your credit report by requesting a free copy at AnnualCreditReport.com. You can get all three copies of your credit reports from Equifax, Experian, and TransUnion once a year without harming your credit score.

Can credit score go negative?

No, the credit score is between 300 and 850, representing your current credit situation. It would be more logical if it started with 0, but it cannot go negative even then.

How often does credit score change?

Your credit report is updated once a month, and your credit score does the same. However, lenders sometimes file reports more frequently, which can cause these scores to change more regularly. Depending on your situation, you don't necessarily need to check your credit score every month, just once every 3-12 months.

Which credit score is most accurate?

All credit scores are accurate, but most lenders use the FICO® Score. At the same time, it is essential to understand that this does not mean that your lender uses this particular model or reports to all three credit bureaus, so you should know your credit scores and check credit reports from all bureaus.