Find Your Credit Score
Edited by Train Wreck, Eng, VisiHow
Maintaining a good credit score is very important for a number of reasons. In the United States, there are three main credit reporting companies. In this article, we will review how your credit score is used, what your credit score is composed of, why you should check your credit score, how you can request your credit report, what to look for on the report(s) you receive, and what you can do if you discover that your report is incorrect.
What your credit score is used for
Your credit score may be requested by any lender whenever you make an application to obtain credit. Whether you are applying for a personal loan, trying to make a large purchase such as a home or a new car, go to college, or apply for a credit card, a lender will request a copy of your credit report in order to determine whether or not you will be able to pay back the amount you are trying to borrow.
What is a credit score
Your credit score is a numeric value, ranging from 300 to 850, that represents your history of obtaining credit and fulfilling your payments. Your credit score or rating is composed of five weighted parts: your payment history, the amounts you owe, the length of your credit history, the types of credit you have open, and the number of inquiries on your account. If you have a high credit score, you are viewed as less of a risk to the lender. If you have a low credit score, you are viewed as a high-risk borrower and your application may even be denied.
Why you should check your credit score
It is generally recommended that you review your credit report once a year for any errors. If you are trying to build credit or recover from past financial hardship, checking your credit report is a good way to monitor your progress and know that when you are ready to apply for credit again, your score is in good shape. If your credit score is already high, checking your report annually will help you maintain it. Additionally, making sure you know exactly what is contained on your credit report is one step you can take to protect yourself from fraud.
How to request your credit report
Requesting your credit report is actually quite easy. Within the United States, there are three major credit bureaus: TransUnion, Experian, and Equifax. As an added bonus, as a result of the FACT Act of 2003, you are entitled to receive one free credit report from each agency every year. You can request your free report online, by phone, or by mail.
- 1To request your free report online:Visit the Annual Credit Report site.Advertisement
- 3To request your free report by mail:Complete the request form found online at the FTC.Gov website and mail it to Annual Credit Report Request Service, PO Box 105281, Atlanta, GA 30348-5281
What you should look for on your credit report
When you receive your credit reports, it is important that you know what information you should be looking for. In short, your report should contain only information about you. Look for wrong social security numbers, misspelled or incorrect names, addresses that are not and have never been your own, and employers you have never worked for. Additionally, look for accounts that you never opened as well as information that may dramatically affect your score but is old. Most types of credit have a 7-year reporting limit, however a declared bankruptcy can appear on your report for up to 10 years. If negative information is older than this time period, it can be disputed.
What if your credit report contains an error
If you find an error on your credit report, it's important that you contact the credit reporting company as well as the company that provided the information to the bureau in writing or online. Instructions on how to file a dispute with each of the bureaus should be included on your report. In your letter, you will need to include your full name and current address, as well as each item you are disputing with an explanation of why you believe it is inaccurate. Once a dispute is received, the credit bureau must investigate it and inform you of the outcome.
Reviewing your credit report once a year is a critical step in maintaining and increasing your financial stability. If you have suffered from a poor credit rating, there are steps you can take to improve your score over time. For more information about your credit score, pulling yourself out of debt, and recovering from fraud or identity theft, make sure to read our other articles on credit and managing finance both for yourself and for your children or grandchildren.
- If you have problems with any of these steps, ask a question for more help, or post in the comments section below.
Categories : Financial
Recent edits by: Eng, Train Wreck