Whether you’re looking for a mortgage, car loan, refinance loan or auto insurance, your credit score will determine the rate you get! Getting a free credit score from time to time will help you stay on track in your financial journey. We break down everything about credit scores and reports in this post.
Having your finances in order is one thing – but keeping track of and building your credit score is a full-time activity in itself! Thankfully, credit scores are no longer hidden behind a veil, and most companies allow consumers to access their credit scores, review their history, and make necessary changes to their lifestyles.
In this post, we enumerate the ways in which you can access your credit. Some let you access your free credit score, while others may charge you a fee for the score and advice on how to improve it.
What is a credit score?
A credit score is a number that indicates your overall risk profile and the probability that you will repay a loan you take. Credit scores are calculated by specialized credit-scoring companies, which track data and analytics about your spending, debt, loans, and more.
Some of the factors that are used to calculate your credit score include:
- Your payment and buying history
- History of loans taken and repaid
- How many loans you currently have open
- The average age of loans
- Average credit spends every month
- Credit card applications
How is your credit calculated?
There are two main credit-scoring companies – FICO and VantageScore. Each of them uses different criteria and weightage to calculate every individual’s credit score.
Fico calculates credit score based on:
- Payment History (35%)
- Amounts Owed (30%)
- Length of credit history (15%)
- Credit mix (10%)
- New Credit (10%)
VantageScore calculates credit scores based on:
- Payment History (40%)
- Age and type of credit (21%)
- Percentage of credit limit used (21%)
- Total balances (11%)
- Recent credit behavior (5%)
- Available credit (3%)
Where can I get my free credit score?
You can get your free credit score in the following ways:
- Credit card companies and some car loan companies provide their customers with free credit scores every month. This can be usually found listed on your monthly statement or in your online account.
- Free credit score websites/services: You can sign up for one of these websites, some of which are funded by advertisers. For those that are not, you can sign up for a monthly subscription that tracks your credit and furnished you with a “free” score
- From credit counselors: These professionals offer money management advice and counseling for debt-ridden customers. Some of them can provide you with your credit score for free and help you improve it.
Can you check your credit score without hurting it?
Yes, you can keep track of your credit score through a soft credit inquiry, which does not negatively impact your score. These soft credit pulls remain on your history for 12-24 months but is not visible to any lenders or financial institutions that offer loans.
However, applying for a car loan, personal loan, mortgage, or credit card will result in a hard credit inquiry. This will impact your score by 4-5 points and may stay on your record for more than two years. It will also be visible to any future lenders you may apply to.
How often can you check your credit score?
Checking your free credit scores will not hurt your credit – so keep track of it as often as you want. Seeing your score rise because of good financial habits can be a great motivator!
What is a free credit score report?
You are entitled to a free credit report every year from each of the three major credit bureaus – Experian, Equifax, and TransUnion. All three of them maintain a website – www.annualcreditreports.com – which can be used to fetch one or even all three free credit reports at the same time.
However, you should remember that the credit report DOES NOT show your credit score.
Instead, the credit report includes:
- Identifying information
- Your bill payment history
- Your current loans repayment status
- Information on hard and soft inquiries
- Collections accounts
- Types of credit accounts
How to get your free annual credit report
You can request a copy of your credit report from each of the three credit bureaus – TransUnion, Equifax, and Experian – in the following ways:
- Online: Visit
- Phone: Call (877) 322-8228
- Mail: Download and complete the Annual Credit Report Request Service, PO Box 105281, Atlanta, GA 30348-5281″
Is it safe to get a free credit score?
Yes, it is safe to get your free credit score as long as you request it from a trustworthy website or service. The best way to keep track of your score is through your credit card company. If you don’t mind paying a small fee to get better insights, then you can buy your credit score from any of the three credit bureaus – TransUnion, Equifax, or Experian.