The Fair Credit Reporting Act requires each of the three credit reporting bureaus to supply consumers with a free credit report once per year. Federal law also entitles consumers to receive free credit reports if any company has taken adverse action against them. This includes denial of credit, insurance or employment as well as reports from collection agencies or judgments, but consumers must request the report within 60 days from the date the adverse action occurred. In addition, consumers who are on welfare, people who are unemployed and plan to look for a job within 60 days, and victims of identity theft are also entitled to a free credit report from each of the reporting agencies.
Lenders need not reveal their credit score head, nor need they reveal the minimum credit score required for the applicant to be accepted. Owing only to this lack of information to the consumer, it is impossible for him or her to know in advance if they will pass a lender's credit scoring requirements. However, it may still be useful for consumers to gauge their chances of being successful with their credit or loan applications by checking their credit score prior to applying.
Two companies dominate credit scoring in the U.S.: FICO® and VantageScore®. They calculate scores from information in your credit reports, which list your credit activity as compiled by the three major credit reporting agencies: Experian®, Equifax® and TransUnion®. If you have a good VantageScore®, you're likely to have a good FICO® Score, because both consider the same factors: Payment history: your record of on-time payments and any "derogatory" marks, such as late payments, accounts sent to collections or judgments against you. Credit utilization: balances you owe and how much of your available credit you're using. Age of credit history: how long you've been borrowing money. Applications: whether you've applied for a lot of credit recently. Type of credit: how many and what kinds of credit accounts you have, such as credit cards, installment debt (such as mortgage and car loans) or a mix. A credit score doesn't consider your income, savings or job security. That's why lenders also may consider what you owe alongside what you earn and assets you have accumulated.
Your credit score and credit report are separate from one another. Your report is your entire credit history of all your installment (loan) and revolving (credit card) accounts. Your credit score on the other hand, is a number calculated from your credit history that shows where you stand in terms of credit health. Even though the two are related, you do have to request them separately.
But WalletHub isn’t the only place you can get a free credit report. The most important alternative is AnnualCreditReport.com, the government-sponsored site where we all can get a copy of each of our three major credit reports every 12 months. While WalletHub provides unlimited access to your full TransUnion credit report, updated daily, you can use AnnualCreditReport.com to review your other two reports from Experian and Equifax. But don’t check both at the same time. Review one of them now, and save the other one for later — say, six months from now. Pulling your Experian and Equifax reports in six-month rotations will help you ensure you’re not missing anything for an extended period of time. Just bear in mind that using only AnnualCreditReport.com would be a mistake, as it would blind you to credit-report changes for much of the year.
In today’s banking environment, the decision to offer you a mortgage or grant you a credit card sometimes comes down to one simple thing: your credit score. Based on information in your credit report (no, they are not the same thing), this numerical rating provides an easy way to assess your risk of defaulting on a loan. No wonder, then, that consumers are eager to find out their score – and if possible, for free.
Get a free copy of your credit report every four months. You can receive a free copy of your credit report from each bureau every 12 months. Since there are three bureaus, you can stagger your requests to receive a report every four months so you have better access to recent information. It’s easy to keep track of which bureau you use and when you need to request another free report – just set up calendar reminders on Google Calendar, MS Outlook, or another calendar system.
You are not entitled to a free credit score annually, but it’s easy to get a free credit score. For example, you can see two of your credit scores for free on Credit.com, along with a personalized action plan for improving your credit. Every credit score is a little different, and even the same credit scoring model may produce a different result if it’s based on a different credit report.
* Credit Scorecard Information: Credit Scorecard is provided by Discover Bank, and includes a FICO® Credit Score and other credit information. Credit Scorecard information is based on data from Experian and may differ from credit scores and credit information provided by other credit bureaus. This information is provided to you at no cost and with your consent. You must be 18 years old and a U.S. resident or a resident of America Samoa, Guam, Northern Mariana Islands, Puerto Rico or the Virgin Islands. Your Credit Scorecard will be refreshed the later of every 30-days or the next time you log in to Credit Scorecard. Discover and other lenders may use different inputs, such as a FICO® Credit Score, other credit scores and more information in credit decisions. This product may change or end in the future. FICO is a registered trademark of the Fair Isaac Corporation in the United States and other countries.
Under federal law you are entitled to a copy of your credit report annually from all three credit reporting agencies - Experian®, Equifax® and TransUnion® - once every 12 months. Every consumer should check their credit reports from each of the 3 bureaus annually. Doing so will make sure your credit is up-to-date and accurate. Each reporting agency collects and records information in different ways and may not have the same information about your credit history.
How it works: You can add your teen as an authorized user to your account by logging in to your online account or calling the number on the back of your card. The information required typically includes their name, birthday and SSN. After adding your teen as an authorized user, they will receive their own card that is linked to your account. They can use their card to make purchases just like you would.
Then there are "educational scores," which the credit bureaus produce for you, the individual consumer, to educate you about your creditworthiness. Most free credit scores fall into this category. These scores typically employ the same 300-to-850 scale, but they use proprietary formulas for their calculations that are not the same as the FICO or VantageScores. However, they take similar factors into consideration, so they can give you a ballpark picture of where you're at. More importantly, free scores often come with information about which factors are helping or hurting your credit score. This can give you some idea of what you can do to improve your score.
Under the Fair Credit Reporting Act, a consumer is entitled to a free credit report (but not a free credit score) within 60 days of any adverse action (e.g., being denied credit, or receiving substandard credit terms from a lender) taken as a result of their credit score. Under the Wall Street reform bill passed on July 22, 2010, a consumer is entitled to receive a free credit score if they are denied a loan or insurance due to their credit score.
When you sign up for your free Credit.com account, you get your credit report card that tells you how you’re doing in the major areas of your credit score. Your Vantage score, like your FICO score, is a joint venture of the big three credit bureaus—Experian, Equifax and TransUnion. The Vantage and FICO scoring models are the scores that most lenders use to evaluate you when you apply for a new credit card, a mortgage, and other types of accounts.
In the eyes of lenders, employers, insurance agents, and a host of other people and entities, the state of your credit represents how responsible and even how ethical you are. For example, lenders look at your credit score to determine not only your ability, but your willingness to repay a loan. Insurance companies view an individual with a good credit score as someone who is trustworthy and less likely to commit insurance fraud. Even many employers run a credit check to determine if a candidate is likely to be a responsible employee. (However, it should be noted that employers only have access to a modified version of your credit report which omits some personal information including your account numbers and year of birth.)
The system of credit reports and scores in Canada is very similar to that in the United States and India, with two of the same reporting agencies active in the country: Equifax and TransUnion. (Experian, which entered the Canadian market with the purchase of Northern Credit Bureaus in 2008, announced the closing of its Canadian operations as of April 18, 2009).