Knowing your credit rating is important so that you know where you stand should you apply for an auto loan, a mortgage or a credit card. Your credit rating is a score that provides companies and lenders with a quick reference for how well you handle your finances and pay your bills. A good credit score indicates that you are financially responsible and you know how to properly handle credit. Lenders and credit card companies use the credit score to determine whether to approve credit cards and loans. However, the credit score may also be considered when you apply for an apartment lease, purchase auto and home insurance and apply for jobs.
Each of the three credit reporting companies offer to provide consumers with their credit scores for the information they track on the individual. Though the three agencies may have a lot of the same information for an individual, each agency does not necessarily have all of the information for the creditor. This is because some credit card companies and lenders report payment data to only one or two of the companies. Your credit score may be different from one credit bureau to the next.
Types of Credit Scores
The most commonly used credit score is the FICO score. However, the credit bureaus also offer other scores similar to FICO. The Vantage score is a calculated using data from all three credit bureaus; Equifax, TransUnion and Experian. This score uses a formula that is a little different than the one used to calculate the FICO score.
The Vantage score generally provides a better score than FICO for those who have a short credit history. Another score is calculated by TransUnion, one of the three major credit reporting companies. The TransRisk score is also similar to the FICO score.
Obtaining Your Free Credit Score
Many credit monitoring companies, as well as the three credit bureaus, will provide you with your credit score. Credit monitoring services often promote their services with a trial period in which you will receive your credit score for free. However, you must provide a credit or debit card to initiate the trial period so that when the trial ends, you can be charged for the service subscription.
Each of the three credit reporting companies will sell your credit score to you for a small fee. Each credit bureau offers several credit monitoring plans, and many of these plans also include a trial period. If you subscribe to the service, you will receive a one-time view of your credit score. However, your debit or credit card is needed to initiate the trial period, which is true of even the best credit monitoring services.
Obtaining Your Free Credit Score Without a Credit Card
One company,Credit Sesame, will provide you with two different credit scores when you create an account. The Credit Sesame service is completely free and no credit or debit card is required. When you create an account on the Credit Sesame website at www.creditsesame.com, you receive instant access to your TransRisk and Vantage credit scores. Upon account creation, you immediately see the two credit scores, along with a breakdown of the negative entries on your credit report that may impact your credit score. They also provides you with free monitoring and alerts you when information is added to your TransUnion credit report.