Ultimate guide on how to check your credit score for free

Posted 17.05.2023

Ultimate guide on how to check your credit score for free

From loans and mortgage applications to insurance policies, your credit score plays an important role in your finance. Therefore, a firm grasp of how to check your credit score and how you can build it opens doors for you.

To help you, this guide dives deep into what a credit score is and how you can check your credit score for free.

What is a credit score?

Your credit score depicts your creditworthiness as a borrower. It commonly ranges from 300 to 850, and the closer your score is to 850, the better your credit. While credit bureaus compute your scores differently, they usually depend on your payment history, credit utilization, and accounts.

Your score is one of the most important factors that influence most of your financial opportunities. Specifically, it gives lenders and other companies an idea about your risk level as a borrower. Meaning, credit scores suggest how likely you are to pay back a debt.

Credit scores affect your loan and credit card applications, so they influence your interest rates and terms. If your credit score is 840, lenders may offer you the lowest interest rate and favorable terms. But if your credit score is 430, you may get high interest rates or get declined.

Also, your credit score has an effect on your lease agreement. For example, if you have an excellent credit score, this can positively contribute to your application. But then, if your credit score is poor, landlords may second-guess your ability to pay rent.

How to check my credit score for free?

Whether it’s in good shape or not, it’s important to know your credit score. The good news is that you can check your credit score without hurting it. And, you have a number of options to access your score for free.

Credit card or loan statement. One of the easiest ways to access your free credit score is by checking your credit card or other loan statements. Most banks and credit card companies offer credit scores to customers. Usually, you can find it either on your monthly statement or your online account.
Online credit score tools. Another way to check credit scores is by using credit scoring sites. These sites often offer access to your credit score, credit monitoring, and updates. In some cases, they charge subscription fees, but others don’t. Credit score service and online tools may advertise their services as “free trials,” but they may charge you once the free-trial period ends.So, before signing up, make sure you check if they’ll charge you. Aside from checking any fees, also see what credit scoring model and credit bureau they use. These factors can affect how you interpret your credit score.
Credit counselors. Moreover, you can consult with credit counselors through the Department of Justice or through non-profit organizations (e.g. National Foundation for Credit Counseling). Credit counselors target getting consumers out of debt, and they can help you access and manage your credit score. Often, their services are free or low cost.
Buy your score. You can also purchase your score from credit reporting agencies and other credit providers. In America, there are three major credit bureaus that calculate your score — Experian, TransUnion, and Equifax.
- Experian: You can check your credit score with Experian for free by creating an online account. Unlike the bureaus below, Experian uses the FICO Score 8 model.
- TransUnion: To check your score with this credit bureau, you need to pay $29.95 per month (plus tax if applicable). Even though it comes with a fee, you can have unlimited access and updates to monitor your TransUnion credit report and score. TransUnion bases its credit scores on the VantageScore 3.0 model.
- Equifax: If you want to access your Equifax credit score, you can enroll in Equifax Core Credit. They use VantageScore 3.0 from the data from your Equifax credit report. Unlike TransUnion, you can get your monthly credit scores for free.

Aside from these bureaus, you can also buy your credit scores from other providers, like FICO and VantageScore. Even though you pay for some of these, they come with additional benefits — identity theft insurance, alerts, credit monitoring, etc.

FICO vs. VantageScore

There are many credit scoring models. However, the two most widely used are FICO and VantageScore. These two scoring models differ in their score ranges.

FICO	VantageScore
Exceptional: 800-850 Very good: 740-799 Good: 670-739 Fair: 580-669 Poor: 300-579	Excellent: 781-850 Good: 661-780 Fair: 601-660 Poor: 500-600 Very poor: 300-499

See how the ranges vary per tier? They may differ, but the higher your credit score, the more financially trustworthy you are to banks and lenders. For instance, if you score 820, lenders may offer you the best products and terms. However, if your score falls in the poor range, getting approved can be more difficult, or you may have minimal options.

How often should you check your credit score?

Checking your credit score shouldn’t be a one-time thing especially since you can access free credit scores without negatively affecting them. To be updated with your finance, it’s a great idea to review your scores from time to time.

Because your scores change alongside your financial commitments, knowing where your credit stands helps you monitor and manage it. If you see your credit scores dipping, you can make adjustments to build your credit.

Also, check your credit score if you hope to apply for a loan. This can give you an idea of what your rates and terms may be. In turn, you can still make changes to improve your credit and get better offers.

What affects your credit score?

One thing you should know about credit scores is you have multiple of them. Lenders aren’t required to report to any or all credit bureaus, and they can use different models to calculate your scores. Nonetheless, these are the major factors that shape credit scores.

Payment history
Paying your bills on time makes up 35% of your credit score. Any late or missed payments significantly hurt your credit score, so make sure to pay your bills on time. This can help you build and maintain good credit.
Credit utilization
Another highly influential factor is your credit utilization. This accounts for 30% of your score, and it refers to the amount of credit you use. Using high credit compared to your available credit negatively affects your score. That is why many experts recommend that you only use less than 30% of your credit.
Credit history length
Another aspect that affects your credit score is the length of your credit history. It contributes to 15% of your score. A longer history favors your credit score because it shows your ability to keep your account. Usually, you may consider keeping old accounts active to help build your credit.
Credit inquiries
Every time you open a new credit, it affects 10% of your credit score. A hard inquiry or hard pull appears on your credit report when you apply for a credit card or loan. Making several inquiries at once potentially lowers credit scores a bit because they suggest that you take a lot of debt.However, checking your own credit report and score doesn’t affect your credit. This is called a soft inquiry or soft pull. For that, it’s ideal to frequently check your credit score to make sure you’re updated with your finances.
Types of credit
The credit account types also have implications on your score, usually 10%. Properly handling a mix of credit, such as credit cards, installment loans, and mortgages, shows you can manage different financial obligations.

How to improve your credit?

Now that you know what affects credit, it’s also important to understand what you can do to build your credit score.

Review your credit report: Checking your credit report and credit score can help you know what you’re working with. Through this, you can analyze what boosts and what hurts your credit.
Dispute any errors: If your credit report comes with any mistakes, make sure to contest and have them corrected. This can also help build your credit.
Stay on top of your bills: Since your payment history affects 35% of your credit score, paying bills on time effectively improves your credit.
Reduce your credit utilization: Keep your balance under 30% of your credit limit. You can do this either by paying off your full monthly balance or by asking for a credit limit increase.
Limit your credit applications: Multiple applications at once can damage your credit score. To improve your score, consider avoiding new applications for a while, or allot about 6 months between your applications.

Summary

Understanding credit scores and credit reports can help you determine the best course of action to improve your credit. Many banks and bureaus offer free credit scores and credit reports. So, taking advantage of these can assist you in building good credit and healthy financial habits.

Frequently asked questions

What is a good credit score?

As previously stated, credit score ranges vary, and lenders have different standards when it comes to determining what a good credit score is. For instance, good FICO credit scores range from 670 to 739 while good VantageScore credit scores fall between 661 and 780.

Can I check my own credit score without affecting it?

Typically, you won’t lower your score when you check your own credit score. However, if companies or financial institutions make the inquiry, it can affect your credit score.

How to check my business credit score for free?

Unlike personal credit scores, checking business credit scores usually comes with a price. You can either pay a one-time fee or monthly and yearly subscription fees. While some offer free business credit scores, they usually don’t give you the full level of access.

Credit scores vs credit reports

Credit scores are numerical data that show your creditworthiness. Meanwhile, credit reports contain your credit history. Annually, you’re entitled to one free credit report from each of the three credit reporting agencies.

Carla Soto

Carla is a skilled copywriter at BestFind with a background in marketing and communications. She specializes in reviewing personal loan and finance products to help readers navigate the complex world of personal finance.