A number is a powerful thing. A number can be the grade to pass the Bar Exam, the clincher for the championship game, or the extra push to launch a satellite into orbit. For many Americans, there’s a number so crucial, yet so often overlooked. It’s the difference between driving leisurely to work and rushing to the bus stop every morning, the house of your dreams and the apartment you’re settling for. It’s your credit score, and knowing and understanding that number is crucial to a healthy and independent financial existence.
According to Equifax, A credit score is a complex mathematical model that evaluates many types of information in a credit file, used by a lender to help determine whether a person qualifies for a particular credit card, loan, or service This combination of your on-time payments, length of credit history, types of credit used, and past credit applications can have major implications for your financial future. The credit score is the biggest factor in determining things like the size of a car loan or the interest rate on your mortgage. With a well-maintained credit score, you can end up saving thousands of dollars. The credit score most commonly use by lenders is the FICO score.
While credit scores go unnoticed for many people, checking this important number is not difficult. All you need is an Internet connection, some basic personal information, and around $8 to $25 depending on how many scores you want to check obtain.
Thanks to a landmark piece of legislation, the Fair and Accurate Credit Transactions Act of 2003, consumers are allowed to request and obtain one free credit report every twelve months from each of the three main national credit reporting companies. In accordance with the FACTA legislation, the three giants Equifax, Experian, and TransUnion have set up an easy and convenient means to receive your free credit reports: AnnualCreditReport.com.
The option of requesting your credit reports by phone or through mail exist, although using the online forms on AnnualCreditReport.com will give you your reports instantly. The process is easy – select your state of residence from the drop-down menu, enter your name, address, and social information, then choose which company’s report you’d like to see. You’ll get your credit rating reports from each of the three companies.
Each of the three national credit reporting companies will provide you with one free credit report annually; you can stagger these throughout the calendar year or check all three at once. Comparing the three scores simultaneously is recommended, but with staggering your requests, you can view changes in your credit as the year progresses.
Provide your personal informatin to verify your identity. Submit the online form, and you will have your three credit history reports right in front of you. If you’d like to check your FiCO (or other) credit score, it will cost roughly $5-$8, depending on the company. While the credit report itself is an extremely detailed ledger that shows your borrowing and payment history, the credit score is the number that financial institutions revere in their credit lending decision-making process. Generally, a higher score represents low-risk, giving financial institutions confidence in lending.
The credit report is a vastly important document, and the credit score it spawns is instrumental in building a respectable financial future. The US Government has made the process easy enough, a huge step forward in building a generation of financially-informed consumers and a strong economy. Check your rating and score today.