Checking your own credit score has become this weird taboo thanks to all the misconceptions whirling around the Internet and the scary crap your upstairs neighbor says. Let’s clear up a few of the myths surrounding checking credit scores, and learn how to do it (the right way) to improve your credit score and overall financial health.
Here are the top four ways to check your credit score like a pro:
Check Your FICO Score
One of the those not-quite-true things you always hear buzzing around is that nobody actually checks your FICO score, so it doesn’t particularly matter. In fact, a lot of people will check your FICO. It’s often the go-to assessment of your financial health and an indicator of how risky you are.
Your FICO (aka the Fair Isaac Corporation) has developed their own riff on scoring people’s’ credit, and it’s the most-checked score of any lender that offers “instant approval.” It’s kind of the Holy Grail of credit scoring systems. So not only is your FICO score important, it’s possibly the most important.
Many lenders consider the FICO scoring system to be the most accurate, but that’s debatable. Every credit bureau scores things a little different to reflect different things, and the FICO system is no different.
So if you happen to know your credit score number from one credit bureau source, like Equifax, that doesn’t necessarily mean that your FICO score will be the same number. Probably not at all. That’s why it’s important to know where you stand with every credit bureau that potential lenders, employers, landlords, etc. might check.
Checking your FICO is simple, as is checking most credit scores. Head on over to the FICO website at MyFico.com. The only annoying part of the checking-your-FICO-credit-score process is the fact that you’ll probably have to sign up to do so. But don’t worry; it won’t cost you anything. Just don’t opt for any of those tricky premium service package things. You don’t need it, and they might expect you to pay.
Be warned: FICO uses a third party utility called Score Watch. So it’s free to sign up and check your credit within the first ten days after signing up, but then it’ll automatically bill you. If that’s the case; sign up, check your FICO credit score, and then record it somewhere you won’t lose track of it. Cancel the service immediately, so there’s no fear of forgetting and accidentally getting billed.
Do a little comparison research so you fully understand what your FICO credit score means for your finances. Is it a good or bad score? What could be lowering that score?
The FICO website will help walk you through it, but it’s always wise get several outside opinions from trusted sources.
Go Straight to the Source
If you want to skip the sign-ups and avoid dealing with impersonal websites, the old-school option is still absolutely viable. You can directly contact the credit bureaus in order to check your credit score, and to get a more detailed credit report of your history.
With this method, you’ll probably have to pay a several small fees to the credit bureaus themselves, especially if you’ve already checked your credit score recently (you typically get one free check per year, but they’re greedy).
You won’t be able to get your FICO score with this direct method, but you’ll be able to do this to obtain your Equifax, Experian, and TransUnion credit scores, which are the three main credit bureaus in the U.S. In addition to your FICO score, you’ll definitely need to be checking your credit score from each of these in order to get a comprehensive idea of where your credit’s at… BEFORE someone else checks it!
You’ll have to go through some more sign up processes to create a personal identification account. It’s the standard customized security questions, information like your Social Security number, and so on; so that you’re the only one who can access checking your credit score through them. It minimizes risk of identity theft.
Although checking your credit score itself is usually free, it’s the purchasing of your full credit report that’ll cost you a fee. Is the full credit report worth it? Yes.
Check your credit scores for free often, but purchase a full credit report at least once a year. This will help you to correct any errors on your report that could be dragging your credit score down. If you want to improve your credit score, purchasing the full credit reports is the best way to accomplish that. Otherwise you’ll be going into it semi-blind.
Be aware that each credit bureau will typically offer you a 3-in-1 deal. They’ll offer you your credit scores and reports from all three major bureaus with just one purchase. But more often than not, it’s cheaper to just do it one at a time, even though it’s the more time-consuming option. Do a bit of comparison shopping between the bureaus to make sure you’re not overpaying for checking your credit score and getting your full credit history reports.
Credit Monitoring Websites Aren’t All Scams
If you see it advertised on tv, it’s hard to trust it. Ordinarily, that’s a more than valid concern. But when it comes to credit monitoring sites, it might surprise you to know that they’re actually pretty useful.
Yes; they’ll probably charge you a monthly subscription fee to continue monitoring and checking your credit scores and reports. But it’s worth it if you’re committed to boosting your credit score numbers.
You can sign up for credit monitoring systems directly through the three main credit bureaus, as well as through MyFICO.com. But third party credit monitoring systems can do the trick, too (and occasionally cheaper than through the credit bureaus directly). Make sure that the third-party credit monitoring website is 100% legitimate. A quick Google search of user/customer reviews should answer that question for you.
The biggest benefit of signing up for a credit monitoring system for checking your credit is that you’ll receive frequent updates. They’ll alert you to any changes to your credit score, help you identify any suspicious filings in your report, and you’ll be able to report potential errors to the bureaus as they happen. These things will be instrumental in checking your credit score in a way that allows you to bring that number up to pristine condition.
These services allow you to continue checking your credit score on a monthly basis, rather than having to wait for another year to roll around before you can do a soft credit check for free. So while a person with an already-fantastic credit score might not have a real need for these services, someone with a poor or average credit score will probably find it useful.
Another lesser-known benefit of credit monitoring systems is an added layer of security to your finances. These can range from insurance against stolen or lost credit cards (you can cancel all the cards in your stolen wallet in one click through some credit monitoring services) as a kind of safety kill-switch, or even insurance in case of identity theft. This will help protect you immediate finances, but they’ll also protect your credit score from some guy in Tahiti who seems to be going on a shopping spree with your credit card and tanking your score.
Again, if that happens without your knowledge, your credit score could take a serious dive. That’s why these credit monitoring systems can prove useful. It’s up to you if you want to spend the extra money, but it’s a great tool for some people. Just remember to double-check that you’re going through a trusted source if you opt for a third-party credit checking service.
If You’re Not Too Worried, You Can Just Check it Once a Year
Checking your credit score is free… if you want to do the basic annual reports. So if you’d rather not spend a dime checking your credit scores and reports (which is completely fair), then you can simply check it once a year for free, at zero risk to damaging your credit score itself.
Consider this the basic internet package. You need it, it gets the job done, it’s cost-effective, and there’s really no need for anything fancier unless you really want or have a specific need for it. The free annual checking of credit scores is just fine for the majority of Americans.
All that being said: checking your credit score with the free annual report is an absolute must. Don’t treat your credit score as an optional thing. It affects more of your everyday life than you might realize, so you should always check once a year.
Make checking your annual credit report a birthday or New Year’s tradition. Whatever you need to do to make it a habit. Look it over carefully, and report any potential errors to the credit bureaus. Seriously… you’ll notice a significant improvement to your score if you practice good credit checking habits!
So here’s how you do it: go to AnnualCreditReport.com. Thanks to the Fair Credit Reporting Act, everyone is entitled to a free credit check once a year. This applies to all three of the major crediting bureaus, but not to FICO. But you can usually check that for free, anyway.
If you prefer an over-the-phone approach, you can call 1-877-322-8228. But for people who prefer the convenience of the website, just select your state and answer a few basic questions. Just the standards: contact information, social security number, personal security questions, and so on.
They’ll probably ask a ton of questions about your finances. That’s what you set out to do, after all. This’ll include a history of any loans or mortgages you may have taken out, your credit card information, and some personal finance information to help give a picture of your economic standing. There’ll even be some “trick” questions, just to ensure that you’re providing accurate information.
Once you’re finally given the green light to receive your credit report, and you’re able to go about checking your credit score, hit the print button. Since you’re only allowed one free glimpse per year, you’ll want a hard copy for your records.
Take some time to go over that printed-out version of your credit reports. There are far more errors than most people realize. There could be someone else’s transactions on there, “late” payments that are inaccurate, and typos that could hurt your credit score. If you dispute those iffy negative marks on your credit report, the bureaus will usually just take them off. You’ll be able to immediately improve your overall credit score.
Almost every credit report has at least one error, so if you’ve been too scared of the “checking your credit is bad” myths, then you’ve been doing your finances a disservice. You could be letting these everyday errors on your report negatively affect your score. So check your credit reports at least once a year, and check them well!
The fancier versions of checking your credit will cost you money, but they will let you check your credit score more than once a year and you can check for fishy stuff listed on your credit report so that you don’t have to wait a full year. But the annual free credit reports will do the trick, and they won’t cost you any money. Everyone’s finances are different, so pick whatever works best for you.
Just make sure that you aren’t performing a “hard check” on your credit score. That’s the kind that lenders use, and it does damage your credit score slightly. That’s why you don’t want to apply for multiple loans that you don’t think you’ll qualify for; it’ll show up on your credit report needlessly, and repeating the action could drive your score into the dirt.
However, it’s not easy to do a hard check while checking your credit score, so don’t worry about it too much. Checking your credit is like going in for an annual physical at the doctor’s office. It’s annoying, and you’ll grumble about how you don’t even need it. But ignoring your credit score is as dangerous as ignoring your health. It’s necessary if you intend to keep your future safe.