Where is the best place to check your credit score?
The Fair Credit Reporting Act was passed in 1970 it was to curb abuses of negative reports on consumer credit reports.
These reports were in a sense, personal investigation, that collected lifestyle information on people including cleanliness, marital status, sexual orientation and drinking habits.
This information would then be used against people who wanted to obtain credit.
The law was revisited in 2003 by Congress when they passed the Fair and Accurate Credit Reporting Act of 2003, which added more consumer protections, and the requirement for credit reporting agencies to provide free credit reports once a year.
Free credit reports are a right and you should take advantage of them. If you plan to buy a house, a car, or apply for a loan, a credit report can give you advanced warning if there’s a chance that you’ll be denied.
Read on to learn where the best place is to check your credit score for free.
Why Is Your Credit Report Important?
It’s true that a credit report is necessary if you’re going to make a large purchase or loan.
There are several other important reasons why you’d want to check your credit.
Checking your credit on a regular basis helps protect you from identity theft. In 2017, about 16 million Americans were the victim of identity theft.
There were also a record number of information breaches where social security numbers and credit card information was compromised.
By checking your credit regularly, you can tell if there’s been an unusual purchase or a credit card application you know you didn’t apply for.
Unfortunately, many people notice this too late and then have to pay thousands of dollars to repair their credit.
What Makes Up Your Credit Score?
You may hear a lot about FICO Scores and Credit Scores. There’s a slight difference between the two.
Your credit score is the score that’s used by the three major credit bureaus – Experian, Equifax, and TransUnion – each bureau will have a slightly different credit score.
Your credit score is a number that ranges between 300 – 850. The higher the score, the better your credit.
Your FICO Score was created by the Fair Isaac Corporation is an average of the three credit scores that are weighted by five components: payment history, the amount owed, amount of new credit, length of credit history, and types of credit.
There’s also VantageScore, which was created through a collaboration by Equifax, TransUnion, and Experian.
These scores take the same data about your borrowing and payment history. These reporting bureaus weigh the information differently.
For example, FICO will look at your payment history and use that to determine 35% of your score. VantageScore takes the same information but uses it to determine 40% of your score.
Differences Between Reporting Sites
It’s important not to rely on just one site for your credit score. There may be information missing from one credit bureau or another site has older information.
We’ve also just outlined how the different agencies will come up with different numbers out of the same information.
Therefore, you’re going to want to get your credit score from 2-3 reporting sites for the best overall picture of your financial health.
This will also help you be more prepared for a loan or big purchase because different lenders use different credit scores to determine your creditworthiness.
Some banks and lenders will use FICO, some will use VantageScore, others will rely on one of the credit bureaus for information.
What to Look for In Credit Reporting Sites
There are a lot of sites on the Internet that pose as legitimate credit reporting sites. These sites will force you to pay a fee for your credit report.
Another popular tactic that’s used by some of these sites is to offer a credit report for free, but you have to sign up for a free trial for their services.
You’ll sign up, enter your card information and forget all about it until you see the charge show up on your credit card.
These sites are the ones to avoid.
You’ll definitely want to make sure that you have the spelling of the site correct. Many unscrupulous sites have popped up hoping that you’ll misspell a URL, sending you to the wrong site and putting your information at risk.
The Best Place to Check Your Credit Score
When you’re looking for credit reports, you’ll want to use a trusted site that many consumers use. You can ask a lender if they have recommendations, or you can read reviews of various sites.
Annual Credit Report is the only site that’s mandated by law. It’s part of the Fair Credit Reporting Act. This is the site that TransUnion, Experian, and Equifax use to distribute their free credit reports as required by law.
You’re entitled to one credit report every 12 months. If you have to pull your credit report twice within a year, you’re better off using one of the other sites.
Credit Sesame is another legitimate free service that allows you to pull your credit score. They use the VantageScore from TransUnion, which will give you a general idea of your credit.
You can read a full review of Credit Sesame here.
Credit Karma is by far the most popular site to get a free credit score. They offer daily updates for the three Credit Bureaus and credit monitoring.
They do make their money off of credit card and loan ads disguised as “recommendations.” As long as you understand that, and go through a trusted lender for your loans, there’s no reason not to use it.
Your Credit Card Company
Your credit card company may offer a free credit check-up. Discover, Chase and Capital One offer free credit reports for select card accounts.
All three of the agencies use VantageScore for your free credit reports.
Check Your Credit Today
Now that you know the best place to check your credit score, isn’t it time to take a look at your financial health?
After all, if you can’t get a credit card or loan, you have no idea where to start to clean up your credit. It can also protect you in the case of identity theft.
If you’re ready to apply for a loan, Bonsai Finance can help you find the right lender to fit your needs.