How To Check Your Credit Score

Your credit score plays a significant role in your financial life. It affects whether or not you’ll qualify for loans, how much interest you’ll pay, and even your ability to rent an apartment or secure a job in some cases. When you’re working toward a big purchase like a home, understanding your credit score can also help you find the best loan options, including low interest home loans. However, there’s something most people don’t realize: You actually have more than one credit score.

Different credit reporting agencies use different data to calculate your credit score, and lenders use different scores for various types of loans. This means that when you check your credit score, it might vary slightly from the score you see on another platform or from the score a lender uses. So, how do you keep track of your credit score, and how can you make sure you’re seeing an accurate picture of your financial health? Let’s break it down.

What is a Credit Score?

Before we dive into how to check your credit score, let’s quickly review what a credit score is and why it matters. A credit score is a number that lenders use to gauge how risky it is to lend you money. The higher your score, the more likely you are to get approved for loans at lower interest rates. A lower score might mean higher interest rates or even being denied credit altogether.

Credit scores are typically calculated by three major credit bureaus: Equifax, Experian, and TransUnion. These companies collect data about your borrowing and payment history, and they use that information to calculate your score. However, not all lenders use the same scoring system, and different types of loans might rely on different versions of your credit score.

Why Do Credit Scores Vary?

You might be surprised to learn that your credit score isn’t just one number. There are actually multiple credit scores out there, and each one can be calculated slightly differently. The reason for this is that there are different scoring models, and credit reporting agencies can use different data when calculating your score.

For example, FICO and VantageScore are two of the most commonly used credit scoring models, but they don’t calculate scores in exactly the same way. Lenders may use either of these models, or sometimes a mix of both, depending on the type of loan you’re applying for. This is why it’s normal to see slight differences in your credit scores across different platforms or credit bureaus. The good news is that while your score may vary, the general trend of your score will stay the same—whether it’s excellent, fair, or poor.

When applying for a low interest home loan, for example, a lender may use a specific version of your score to determine your loan eligibility. They might rely on one bureau’s data over the others, or use a more updated scoring model that factors in recent credit behaviors. This is why it’s important to keep track of your credit score from multiple sources.

How to Check Your Credit Score

There are several ways to check your credit score, and most of them are free. The key is to know where to look and which service to use. Let’s go over some of the main ways to access your credit score.

1. Get Your Free Credit Report from the Government

Under federal law, you’re entitled to a free credit report from each of the three major credit bureaus every year. You can request your free reports by visiting the official website, AnnualCreditReport.com. While this service won’t provide you with your exact credit score, it will give you a detailed look at your credit history, including any open accounts, late payments, or bankruptcies.

Checking your credit report regularly is a good way to catch any errors or signs of identity theft early. If you see any discrepancies on your report, you can dispute them with the relevant credit bureau.

2. Use Free Credit Score Services

There are several free services available that provide access to your credit score. Websites like Credit Karma, Credit Sesame, and NerdWallet offer free access to your credit score from one or more of the credit bureaus. These platforms use the VantageScore model, and while it may not be exactly the same as the score your lender uses, it’s a good way to get an idea of your overall credit health.

These services not only show your credit score, but they often provide credit monitoring features, alerts for any changes to your report, and tips for improving your credit score. Keep in mind that while these services are free, they may make money through advertising or by offering paid services, such as credit monitoring or identity theft protection.

3. Check Your Score Through Your Bank or Credit Card

Many banks and credit card companies now offer free access to your credit score as a benefit to their customers. If you have an account with a major bank or credit card provider, you might be able to view your score directly through your online account or mobile app. This is usually a free service, and some providers even offer regular updates to keep you informed of any changes to your score.

This is a convenient way to monitor your credit score regularly without having to search for it through third-party websites. Plus, it can give you a better idea of how your credit score is progressing as you continue to make payments or pay down debt.

4. Purchase Your Credit Score Directly from a Credit Bureau

If you want to see your exact FICO score or another specific version of your credit score, you can purchase it directly from one of the credit bureaus. You can buy a score from Equifax, Experian, or TransUnion for a small fee, and this score will typically be the one used by lenders in their decision-making process.

However, it’s worth noting that for most people, a free credit score through services like Credit Karma or your bank should be sufficient for general monitoring. If you’re applying for a large loan, like a mortgage, or you’re preparing for a financial review, it might be worth the extra cost to purchase your exact FICO score.

What to Do if Your Credit Score is Low

If you find that your credit score is lower than you expected, don’t panic. A low score can be improved over time with consistent effort. Here are a few tips to start boosting your score:

• Pay Your Bills on Time: Your payment history is the most significant factor in your credit score. Paying your bills on time is crucial for improving your score.
• Pay Down Debt: Reducing high balances on credit cards will lower your credit utilization rate, which can have a positive impact on your score.
• Check for Errors: Regularly review your credit report for any mistakes, such as incorrect accounts or late payments. Disputing errors can improve your score.
• Avoid Opening Too Many New Accounts: Every time you apply for credit, a hard inquiry is made on your report, which can temporarily lower your score. Try not to open too many new accounts in a short period.

Conclusion: Stay on Top of Your Credit Score

Checking your credit score is an important part of managing your finances, whether you’re applying for a low interest home loan, preparing to make a big purchase, or simply trying to get a clearer picture of your financial health. By understanding how your credit score is calculated and where to check it, you can take the necessary steps to maintain or improve it over time.

Remember, your credit score isn’t set in stone. By monitoring it regularly and making small adjustments, you can improve your score and set yourself up for financial success. So, take the time to check your credit score, stay informed, and keep working towards your financial goals!