Checking your credit report and score is an essential part of managing your financial health. But with so many options available, it can be hard to know where to start.
First, it’s important to understand that the “official” credit score used by 96% of banks is the FICO score, which is only available through Fair Isaac and Company. However, there are other estimations available that simulate your FICO score.
It’s important to note that while FICO scores are only available through Fair Isaac and Company, other credit scoring models also use similar factors to determine your creditworthiness.
The five main factors that make up your FICO score are:
- Payment history (35% of your score): This includes factors such as whether you pay your bills on time and how often you’ve missed payments in the past.
- Credit utilization (30% of your score): This measures how much of your available credit you’re using. Keeping your balances low can positively impact your score.
- Length of credit history (15% of your score): This takes into account how long you’ve had credit accounts and the average age of your accounts.
- New credit (10% of your score): This includes factors such as how many new accounts you’ve opened recently and how many recent credit inquiries you have.
- Credit mix (10% of your score): This takes into account the types of credit accounts
- you have, such as credit cards, loans, and mortgages.
By understanding what makes up your FICO score, you can take steps to improve your creditworthiness and ultimately achieve your financial goals.
One popular option is Credit Karma, which provides your TransUnion score for free and allows you to track your score over time. Other similar sites include Quizzle and Credit Sesame, which provide your Experian score.
Credit monitoring services are another option, providing all three credit scores and reports for a monthly fee. Some popular services include CreditReport.com and GoFreeCredit.com.
If you want to see your real FICO score, you can purchase it directly from myFICO.com or sign up for their credit monitoring service. Keep in mind that applying for a loan can also provide access to your FICO score, but this can slightly hurt your credit score.
Regardless of the method you choose, it’s important to regularly check your credit report and score to identify any errors or fraudulent activity. A difference of just 100 points in your credit score can mean thousands of dollars in additional interest charges, so staying on top of your credit health is crucial.
In conclusion, taking the time to check your credit score and report is a smart investment in your financial future. With so many options available, it’s easy to find a method that works for you.