How to Check Your Credit Score

Perhaps you would like to buy a cute little bungalow with room for three kids and a dog or a car that tells the world you have finally arrived, but you are not sure where your credit stands. You may have a couple of unpaid medical bills, have paid your car note late a few months ago or have filed for bankruptcy awhile back.

It is a good idea to check your credit score before you start looking for a loan. The number of times companies pull your credit file because you have sought a loan gets figured into the credit score calculation. If you have asked too many companies for credit, your score may decline. However, comparison shopping for a loan during a short period of time may not have the same negative effect, at least not for that loan. Before you ask lending agencies to pull your credit, review your file yourself. If your score is low, you may be able to improve it by paying off a couple of bills or disputing inaccurate items.

In the United States you are legally entitled to a free credit report once a year; however, the law does not guarantee you a free copy of your credit score, which can be obtained for a fee. If you do not want to pay the fee, you may still gain a good idea of where your credit stands by reviewing your credit reports. Each of the three major credit reporting agencies must provide a free copy of your credit file once a year at no charge if you request it. These agencies are Experian, TransUnion and Equifax, which operates as Computer Sciences Corporation, or CSC, in some regions of the country.

Obtaining a copy of your credit report has been simplified in recent years through the use of the Internet. Normally, you can obtain your credit reports online without making a phone call or sending a letter. To simplify the process even further, you may go to AnnualCreditReport.com. Once you initiate a credit report request by answering some basic questions about yourself, this site will direct you to each credit reporting agency for your report.

If you lose your link to AnnualCreditReport.com as you maneuver through the individual reporting agency sites, or if you need to quit after completing one report request, you can always return to AnnualCreditReport.com and log into the site to resume the process. If you would prefer to monitor your credit throughout the year, you may request one report now and each of the others at later points in the year. If you do not feel comfortable handling this online, you may call or download a form from AnnualCreditReport.com and mail them a request or mail requests directly to the individual reporting agencies.

Many other companies advertise that they provide free credit reports and scores, but most such offers come with strings attached. Often they require that you subscribe to a credit monitoring plan where you can monitor your credit report regularly. Of course, this plan costs. Access whenever you want it usually comes at a premium. You may be able to sign up and then opt out during a free trial period, but sometimes you will be required to pay for at least three months of the company’s monitoring services. The major credit reporting agencies also offer these types of monitoring services.

You will find several different types of information in your credit report:

Personal information like your name and past addresses and places of employment.

• Items that potentially could have a negative affect on your credit score, which include public records like court judgments and credit items, normally overdue bills. These items may vary from one credit agency’s report to another as not all creditors report debts to each of the three credit agencies. Some creditors do not report items to these agencies at all.


• Accounts you have that are in good standing with the creditor. Things like car loans, student loans and credit cards may be listed here. If you have paid late or not made a payment, this will show up. Your payment terms may also be visible. These items may show whether or not a payment was made each month or if it was 30 days, 60 days or 90-plus days late. Even one late payment could lower your credit score, especially a recent one. In addition, your balance may affect your credit score. High credit card balances in proportion to available credit could lower your credit score. Paying off your balance each month or maintaining a balance of 10 percent or less of your total credit limit (i.e., $100 or less balance for a card with a $1,000 credit limit) suggests to creditors that you have the ability to pay. In addition, although a consistently paid loan or credit payment has a positive affect on your credit score, those monthly payments will reduce your available income and that can mean that you qualify for a lower loan amount when trying to buy that new house. As you seek to build your credit, keep in mind that not all companies report positive information to the credit reporting agencies. Some businesses that do not report as a standard practice will do so if you ask them.


• Requests for your credit report. You will find two types. When you ask a company for a credit card or loan and they pull your credit file, the request shows up on the credit report for two years. The company may not pull a file from all credit reporting agencies, though. Too many such requests will hurt your credit score. A second list of requests for your credit information will also be shown on your credit reports. These come from companies who want to determine your creditworthiness in order to market a service to you. These requests do not have a negative affect on your credit score.

In recent years identity theft has become a major problem. Reviewing your credit report and score regularly may help you catch this before it mushrooms. If you find a group of unpaid bills on your credit report for things you never bought or loan inquiries from companies you never contacted, you could be a victim of identity theft. If you think this may have happened to you, you can dispute the fraudulent items and attempt to have them removed. Go to the credit agency websites, look for the section that covers disputes and follow the directions. You can also call or mail a dispute, but you will need a copy of your credit report.

Credit reporting agencies may ask for a reason for the dispute and generally provide identity theft or fraud in a list of possible reasons for the dispute. When you dispute an item, the creditor or court office, in the case of judgments, must respond quickly or the item will be removed from your report automatically. The credit agency has 30 days to investigate a dispute or 45 days if your dispute was made on your annual free report. Obtaining a copy of your credit report may give you the information you need to put a hold on compromised accounts, to make a police report and to protect yourself from further loss or liability.

Even if you have already received your free credit report during the last year, you are legally allowed another free copy if during the last 60 days you have been rejected for credit, been refused an apartment lease or been given poor terms on a loan offer due to information found in your report. The credit agency may ask for details of this rejection to compare to its files when you ask for the free report.

Understand that a good credit score does not guarantee that you will be approved for a credit card or loan. The score you receive from the credit agency may not be the score all companies use to determine your creditworthiness. Different credit score formulas exist that are used by different businesses. In addition, one credit agency’s report may contain more negative items than another, and thus, that company’s score could be lower than the score provided by the other two credit reporting agencies. If a car dealer uses the low-scoring agency’s report, you may not get a loan even though the furniture store down the block just approved a line of credit for you based on a score from a different credit agency.

Generally, a credit score above 620 puts you into the positive range, and 720 or above means excellent. Reviewing your credit report regularly will help you to spot problems and raise your score.