Obtaining your credit score

I’m surprised how often people don’t know their credit scores. Your credit score (commonly known as your FICO score) is a personal report card on your credit worthiness that is used whenever you apply for credit of any type -- home loan, car loan, equipment lease, business line of credit or credit card. A credit score isn’t the only factor that determines if you get a loan, but it’s important. You have many credit scores. For example, you have one from each of the three major reporting agencies (Experian, TransUnion and Equifax) and a rating from specific industries like insurers. Each agency uses different data and scoring approaches so a high score from one agency doesn’t always mean another agency sees your credit worthiness the same way. If you’re applying for credit, you won’t know which score the lender will use either.
If you want to see your credit report, try to get it for free. Federal law gives you the right to get your credit report for free from the three major credit agencies once every 12 months. Go to www.annualcreditreport.com.

You can also pay for your credit report from one of the major reporting agencies (TransUnion, Experian or Equifax). They charge about $15.95 and you probably only need one version. If you check out the web sites of the major credit reporting agencies, be cautious about their “free” credit reports. These usually require you to sign up for a membership. For example, on the Experian site, below the “free credit report” offer there is this note:


IMPORTANT INFORMATION: This offer is not related to the free credit report that you are entitled to under federal law. To obtain that report, you must go to www.annualcreditreport.com. The free credit report and score offer above requires enrollment in a trial of Triple AdvantageSM. Cancel anytime during the 7-day trial period and pay nothing. Otherwise, you will be billed just $14.95 for each month that you continue your membership.


The major benefit of reviewing your credit report is to see the reasons your score isn’t higher. You can use a credit report as a long-term plan to improve your credit report. Keep in mind though, that it takes many months to improve your credit score. If you’re thinking about obtaining a real estate loan or refinancing and have been plagued by poor credit scores in the past, start improving your credit scores at least 6 months in advance of when you expect to submit loan papers.

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