How to Get Your Free Credit Report & Monitor Your Credit Score

If you were to be graded right now on how well you manage your credit and finances, you would likely be assigned a three-digit figure. This figure indicates your credit score. And just like in school where low grades are frowned upon, having a poor credit score is bad news.

With that said, you should study and strive to get your credit score up. After all, your credit score will be working for or against you when you enter adulthood. It’s an important benchmark most institutions use when determining whether you are eligible for their financial services.

Now, it is essential to understand how vital credit score to life is. It would help if you also were vigilant with the movements in your credit report, and make it habit to check and evaluate your credit report from time to time. If you’re one of the people who used to care less about their credit score and standing, it’s about time to shift this mindset. Your credit score can impact your life in so many ways and the higher you keep it, the better it will be for you.

Why Does Your Credit Score Matter?

You might wonder, “why even bother with my credit score?” If you’ve never applied for a mortgage, credit card and consumer loans, you probably didn’t mind whatever your credit score. But as soon as you begin to take your life more seriously and explore various financial services, you also start to realize that credit score does matter a lot.

Credit scores typically range from 350 to 850. The score is the statistical result of a variety of factors, including how prompt you pay your bills, how much credit you use, the age of your accounts and so on. Having a higher credit score indicates that you are managing your credit wisely.

Credit Score: A Basis of Trust

What does this mean to lenders? Your credit score is their basis on how much they can trust you with their products and services. Having a higher score means you are a responsible borrower and you are less likely to default. In return, lenders can give you the best deals and interest rates.

On the other hand, having a poor score tells them that doing business with you could be risky. They may see you as someone who might neglect his bills or use too much credit. They are afraid that doing business with you could be risky for them, so in turn, they give you higher interest rates or lower credit limits.

Although a credit score is not the sole basis of trust, it can’t be denied that your score can have a profound impact on your financing opportunities.

Credit Score’s Impacts on Your Life

Buying a House

When you decide to purchase a home, the first thing lenders look at is your credit score. Having good credit score significantly increases your potential for mortgage loan approval. If you have a poor credit score, the mortgage lender will see you a risky borrower and may approve your loan only if you settle with a higher interest rate. In turn, this will affect your monthly mortgage amount. If your score is worst, your mortgage loan application could get rejected.

Renting a Home/Apartment

Whether you don’t want to purchase a home yet or has been denied of a mortgage loan, you may be looking into renting an apartment instead. Unfortunately, a lot of landlords do look up their tenant’s credit report and consider that whether to allow you to rent or not.

Buying a Car

If you’re buying a car, you’re likely going to get it financed through an auto loan. Auto loans lenders also take a peep into your credit report to see if you can manage to pay to take on another debt. With a bad credit score, it would seem to them that you are a risky borrower and may only approve your car loan only for a limited amount or higher interest rate. In turn, these will affect your monthly car loan premiums. And if your credit score is worst, you may not be able to get that car at all.

Getting a Job

If you were not hired for a job you applied for, you begin to think of reasons why you were not accepted. You probably wouldn’t think it’s because of your poor credit score, but the truth is, nearly half of hiring managers to check out applicants’ credit score during the hiring process.

Taking out Loans and Credit

Are you looking to acquire a small business loan or signing up for a new credit card? It’s better to work your credit score out first before you do because a lot of lenders are picky when it comes to borrowers with poor credit rating. You may be able to get a loan or a new credit line but under certain conditions such as lower credit limit and/or higher interest rate. You may also only qualify for secured loans and credit.

Negotiating Other Bills

The first five in the list are the most obvious areas that are affected by your credit score, but there a couple more other expenses that are surprisingly affected as well. For instance, if you’re looking to upgrade your phone plan, your provider may deny you of a better deal if you have a poor credit score. Additionally, your insurance premiums are likewise affected with your credit score.

Suffice to say, your credit score matters in a lot of ways, whether you’re looking to acquire big-ticket expense like a home and a car, and monthly bills like insurance and phone plans. It is in your best interest to maintain a healthy credit score to avail most of life’s premium financing opportunities.

Importance of Staying on Top of Your Report

Most people don’t bother checking out their credit reports unless they’re about to make a significant purchase, such as a car or a house. Otherwise, they can’t even be bothered checking out their credit reports at least once a year. But the thing is, your credit report tells you a lot of valuable information regarding your finances other than your credit score. Even if you’re not about to make a huge purchase anytime soon, it is critical to stay on top of your report for these reasons:

Determine Your Financial Health

Your credit report can give you deep and valuable insight into your overall financial health. Checking your credit report regularly tells you where you stand so you can make the necessary adjustments to improve your status further. If you have a poor credit score, you will find out where you got it wrong, whether you’re overusing credit, you’re paying bills late, or you open too many accounts. If the goal is to improve your credit score, you need to understand that it is not an overnight process. It can take several months to see significant improvements, and the first step is to know your financial standing.

Maintain Accuracy of Credit Information

Most times, your credit report reflect accurate information. But there are instances when your credit report can contain a few errors that can negatively impact your credit score. Wrong accounts, outdated information or unreported payments may reflect in your credit score, and it could go on and on unless you spot it early and file for a dispute. And because the credit report is made available to lenders, employers and other institutions, it is only right that your report reflects only what is true and accurate.

Protect Yourself Against Identity Theft

Some people could take interest on your bank accounts and credit accounts, and you could become an unwilling victim of identity without your knowledge. Regularly checking your credit report not only ensures all information are accurate and updated but that there are also no suspicious irregularities. Watch out on names, credit and bank accounts that you don’t recognize. Also, determine if there are hard inquiries and credit accounts that you didn’t do. If you spot any of these weird entries on your report, make sure to report them right away with the right authorities. Letting these activities go on for so long can cause extensive damage on your credit, so make sure you are protecting yourself by doing your due diligence.

To Get the Best Deals and Offers

Your credit report contains pertinent information on the manner of managing your finances. With that said, you also know that having a poor credit score at the moment may make it an improper time to sign up for a new loan or credit line, purchase a new home or car. If you’d like to avail the best deals, you need to work out your credit score and raise it as high as you can to qualify for the best deals and rates. And no other document can give you this much information than your credit report.

Steps in Getting Your Report

Getting your credit report is an easy, painless and often free process. The only site that you need to visit in getting your credit report is AnnualCreditReport.com. It is the only site approved and regulated by law to give out credit reports to consumers. You are entitled to one credit report from each of the credit bureaus once a year. Make sure to log into the official site only as several malicious websites are ripping off AnnualCreditReport.com. Never give out any financial or personal information to any other site other than the official AnnualCreditReport.com.

Here’s the step-by-step guide in getting yours now.

  • You can pull out your free credit report for free from AnnualCreditReport.com. Make sure to log into the right site, beginning with https. While on the site, click “Request Report.”
  • Decide which credit report among the three credit bureaus you’d like to acquire – Equifax, TransUnion, and Experian.
  • Once you’ve chosen the correct credit bureau, you will be directed to its official site. At this point, you may have to answer some questions to verify your identity. It is best to keep your account information handy just in case the site asks for it.  
  • When your identity has been verified, you will get your free credit report. You can return to AnnualCreditReport.com to request for the report from the other two bureaus. You may opt to get them all at the same time for a cross comparison, or you could request one every quarter for better monitoring.

Apart from AnnualCreditReport.com, you may be able to source out your credit score from several other places, such as:

  • Your credit card issuer. Your credit issuer may give your free credit score on a monthly basis. It may not be your FICO score, but it can be a good place to start monitoring your score without an additional charge.
  • Through credit monitoring services. The most popular service providers for credit monitoring are Credit Sesame and CreditKarma. They can give you a clue about what your score looks like.

As far as credit scores go, these two sources can give you insights on your score on a monthly basis without paying a fee. However, if you need more comprehensive information about your credit status, you need to get one from AnnualCreditReport.com.

Recap

Some people dread taking out their credit reports or looking at their credit scores because the reality can be quite painful. However, it is essential for every one of us to stay on top of our finances, and that includes doing everything possible to make sure that your credit report has the right information. With that said, make it a habit to check your credit report at least once a year. It is also essential to improve and maintain your credit score to become eligible for the best opportunities in life.  

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