They are actually growing in importance, and are used by everyone from insurers and lenders to employers and landlords. Your credit score is used to judge the risk associated with dealing with you financially, and this can affect almost every aspect of your life.
The Fair Isaac Corporation (FICO) claims that their scores are currently used to assess financial responsibility by an estimated 90 percent of the top lending institutions in the U.S. While this number is supplied by the company that created credit scoring, there is no denying that it will have an effect on your life.
What You Need to Know About Your FICO Score
Monitoring your credit score is important, especially if you ever plan on purchasing a car, home or any other “big ticket” item. While keeping an eye on your FICO score has never been easier, it won’t matter if you don’t know what you are looking for.
Some of the basic information everyone should know about their FICO scores include,
- Credit scores typically range from 300 to 850, though these numbers can vary depending on the reporting agency. When you are looking at your credit score, you want it to be in the higher range. Lower credit scores usually mean higher interest rates on home and auto loans.
- All credit scores, including FICO are generated with data provided by your creditors. These records are compiled by the three major credit reporting agencies, and turned into your financial report and FICO score.
- An important step that everyone should follow is to keep a close watch on their credit reports. Everyone is entitled to one free credit report from each of the three agencies. Most financial experts recommend requesting one every few months from a different reporting company, instead of collecting all three at once.
- Consumer Reports stated that 28 out of the 60 versions of your credit score produced by FICO are regularly used by top lenders. This only emphasizes how important it is to check it every few months.
What’s A Good FICO Score?
Even though the range for a good or bad FICO score can vary slightly, most lenders agree that 740 or higher will probably get you the lowest interest rates on home and auto loans. You should also remember that your credit score is not the only factor that will determine loan approval or even guarantee low interest rates.
Individual lenders have their own criteria that will not only include your credit score, but a list of other items that will all be factored in together. If you are one of the millions of Americans dealing with bad credit scores, it’s nice to know that it’s not the only factor that will be used to determine loan approval.
If you need some guidelines to follow when you are trying to determine where your credit score falls here is the unofficial range used by the Fair Isaac Corporation.
- Bad Credit: 300-629
- Fair Credit: 630-689
- Good Credit: 690-719
- Excellent Credit: 720 and higher
How to Get Your FICO Score for Free
With the growing importance of knowing your current FICO score, it only makes sense that there are several ways that you can monitor it for free.
You no longer have to sign up for credit cards you don’t need or subscribe to a service to receive regular reports and updates. You can take charge of monitoring your FICO score, and here are 8 easy ways how you check it for free.
- Discover
One of the fastest and easiest ways to check your FICO score is via the Discover website. You do not have to be a member, card holder or even sign up for one, it is a free service that they offer to everyone. In less than 5 minutes, in most cases, you can have a copy of your credit score.
- Banks and Credit Card Companies
While you do have to be a card holder or have a loan account with the following lenders, they do provide you with free access to your credit scores. Simply log into the website and you’ll find your current score listed on your statement. Not only can you check for any errors in your account, you can also monitor your FICO score on a monthly basis.
- Bank of America
- Citi Bank
- American Express
- Chase Slate card
- Barclaycard US
- USAA (via CreditCheck1)
- Merrick Bank (GoScore)
- Wells Fargo (mobile banking app)
- Credit Unions
Unlike traditional banks Credit Unions have only recently begun offering members free access to their FICO scores. Currently there are only a few officially listed which include,
- Pentagon Federal Credit Union
- Digital Federal Credit Union
If you are a member of a Credit Union the best advice is to ask if your branch offers this convenient free service. You might also find it listed on your monthly or quarterly statements, but this can vary.
- Checking Accounts
Many financial institutions are now providing customers with free access to their FICO score even if they only have a traditional checking account. While most will post current scores on loan or credit card statements, only a few are including it on checking accounts.
Before you use another method to retrieve your FICO score, it is best see if your bank offers this service with your checking account.
- Loan Applications
It is important to note that this is only a “one time” way to check your FICO score for free. You don’t want to continuously fill out loan applications every time you want to check your credit score. Not only is this time consuming, it will actually hurt your overall score.
According to the Dodd-Frank Act you have the legal right to see your credit score if your loan application is denied or if you believe that you weren’t offered the best interest rate. This approach to viewing your FICO score only works when you are filing out the application in person, not if you are using an online lender.
- Auto Dealers
Some auto dealerships, including a few Buy Here Pay Here Lots lots will share your FICO score with you, but only if you are applying for financing with one of their lenders. While this method will only allow you to check your credit score every few years, unless you frequently purchase new vehicles, it is one more way that allows you to monitor it for free.
- College Loans
Not all student loan lenders provide their customers with free copies of their credit scores, but the Sallie Mae Smart Option undergraduate program does. They not only provide borrowers with free access to their credit scores, but their co-signers as well. This method does only apply to a select group of people, but if your student loan is through a different lender you might want to check with them to see if they offer the same services.
- Credit Counseling Services
You will want to remember that most credit counseling services do charge a fee. The good news is that FICO has started a free program. 30 credit counseling agencies are participating and will help you learn how to manage your money for free.
A complete list of the participating services is not available, but you can easily find the help you need by contacting the National Foundation for Credit Counseling.
Avoid These Scams
It seems that as there are more ways to check your FICO scores for free, the number of scams also increases. Not only does falling for one of these cons usually end up costing you fees, it could also comprise your identity.
While the number and type of scams promising to get your FICO scores are constantly changing, there are a few red flags that you will want to watch out for. These typically include,
- Being offered a “free” trial period.
- Told that your credit card or other personal information is required.
- A “subscription” is needed.
- Unsolicited links and attachments are sent to your email.
Downloading the attachments or clicking on the links can leave you open to malware, viruses and even put your personal information at risk. With so many safe and legal ways to get a copy of your FICO score, there is no need to ever have to use someone else’s services.
Take Control Of Your FICO Score
Knowing you current FICO score is a part of being financially responsible, and now there isn’t any excuse for you to not know your own score.