How to Check Credit Score Without Stress
Do you know how to check credit score? I am talking to people who already have credit. If you don’t have not started building your credit, there may be nothing to check. For people with credit, it is important that you know different ways one can use to check your credit score. Before then, let’s quickly do an overview about credit score itself. On this note we shall briefly cover the following:
- What is Credit Score?
- What is good credit score?
- How is Credit Score Calculated?
- How to check credit score
What is Credit Score?
Credit score is the three digit figure that indicates your level of creditworthiness. If any lender or organization has ever requested for your credit score, what they are trying to do is to find out the level of risk involved if they should lend you money. That is, they want to know if you will be able to pay back the loan or not. Traditionally, you need to have a credit card before you can have credit score assigned to you. Without credit, it may be practically impossible for credit bureaus to generate your credit score. Nevertheless, there are few creative ways you can adopt to start building your credit score in case you are finding it difficult to get a credit card. For example, you can apply for secured credit card or credit builder credit card. Another way is for you to become an authorized user of a credit card. All these are just for you to start building your credit score. However, you should understand that it is not enough to have credit score. You should ensure that you have good credit score. That is why you should only be an authorized user of a card whose owner has a good credit history.
Read Also: How to Build Your Credit Score without Credit Card
What is good credit score?
What can be described as good credit largely depends on which scoring agency are you looking at. All credit bureaus may not use the same parameters in scoring individual’s credit. For the purpose of this article, we shall thereby limit ourselves to FICO credit score which is most widely used by lending institutions in assessing credit worthiness of borrowers. Below are the different FICO credit scoring you should expect:
FICO Credit Score
| Credit Score | Rating |
| 800 – 850 | Exceptional |
| 740 – 799 | Very Good |
| 670 – 739 | Good |
| 580 – 669 | Fair |
| 300 – 579 | Very Poor |
Read Also: How to Raise Your Credit Score in 30 Days
VantageScore Credit Score
| Credit Score | Rating |
| 750 – 850 | Excellent |
| 700 – 749 | Good |
| 650 – 699 | Fair |
| 550 – 649 | Poor |
| 300 – 549 | Very Poor |
From the above two tables, you can see that the credit ratings are quite different. For instance, if someone tells you that his credit score is 670, you may need to find out where he got the credit score from before you jump into conclusion that certain credit score is good. For instance, credit score of 670 from VantageScore is just fair. But the same 670 from FICO will be considered as a good credit score. So, one can conclude that what can be termed a good credit score is relative. But one thing you should always strive at is to always seek for ways of improving your credit score. The higher your credit score, the better the rating about your creditworthiness. People with good credit score tends to get their loans at cheaper rates.
How is Credit Score Calculated?
There are statistical computations that credit rating agencies make in order to arrive at your credit score. Just for instance, FICO uses the following algorithms to calculate credit score.
Payment History: 35%
Credit Utilization: 30%
Credit Age: 15%
Types of Credit 10%
New Credit: 10%
Therefore, for anyone that wants to improve his credit score, it makes sense to pay more attention to the first two parameters which are payment history and credit utilization.
Read Also: Hidden Benefits of Excellent Credit Score
How to check credit score
Having considered all the above, let’s come back to the main topic of this article which is how you can check your credit score. Essentially, there are three ways by which you can check your credit score. These shall be discussed briefly below:
From your card provider: Every month, you get your account statement from your credit card provider. Among the information provided free nowadays is your credit score. But if you need to check your credit score besides the one that is provided you for free every month, you may need to pay.
Buy from other websites: There are websites that provide this service at a fee. That is, if you want to check your credit score from any of such websites, you will need to approach them and pay for the service. There are websites that may advertise that you can check your credit score free without paying. You need to be watchful before you supply your important private information on such websites. You may soon realise that they have signed you up automatically for credit score check on a monthly basis which you will need to be paying for.
From Free Website: This is one thing that many people are still ignorant of. They don’t know the fact that they can actually get their credit score and credit report for free. Every card holder is entitled to one free credit report from each of the three major credit bureaus in every twelve months. You can apply for your free credit report from annualcreditreport.com for free. You have the option of applying for the three reports at the same time or you can choose to stagger them. Why I usually prefer that one gets the three reports at the same time is for one to be able to compare them for possible discrepancies. Discrepancies can occur as lenders may not report your transactions to all the three major credit bureaus. This will make the three major credit bureaus to have different information in your credit file with them. So, if you have all the three credit reports at the same time, you can easily compare them and find out the missing information. The point is that, you may not know which of the credit bureaus that your lender may approach to inquire about your credit per time. Having your credit files updated will ensure that you have the same information in your credit report regardless of where the lender gets the information from. Also, if there is any incorrect information you discover in any of the reports, you can quickly dispute it so that it can be corrected.