3 Free Services to Help Gauge Your Credit Score
A Guide to Accessing Credit Scores
Your credit score is like your financial report card (feels like school all over again, how exciting). It tells potential lenders how likely it is that you will be able to repay the loan or credit card debt. But, not many people know that there are three major companies that offer free access (once a year) to your credit score so you can stay informed about your financial integrity. It is important to be aware of your credit score and the steps you can take to ensure it stays healthy. Knowing the benefits of each one is essential for maintaining financial health and longevity. Without further ado, let’s explore these three institutions and the benefits they offer.
Equifax: Equifax is a consumer reporting agency which provides access to your credit report and score. They also provide you with educational tools about how to better manage your credit, as well as identity theft protection services. Additionally, they offer dispute resolution services if you think there’s an error on your report that needs correcting.
TransUnion: TransUnion offers similar services as Equifax, but also provides an online dashboard where you can monitor all your accounts, debts, payments, and more in real time. This dashboard gives you easy access to the information you need to make sure your credit score remains strong.
Experian: Experian is another consumer reporting agency like Equifax and TransUnion that offers instant access to all three of your credit reports at no cost with a free trial period of 30 days. In addition to providing detailed credit reports and scores, Experian also offers budgeting advice and other resources that can help you stay engaged with managing your finances responsibly.
Keeping track of your credit score is important for many reasons — from being able to obtain loans or leases for big purchases like homes or cars, having access to the best interest rates on loans or mortgages, even just being able to open up a new cell phone plan (crazy how much influence these three digits have on our lives, isn’t it?). Here are 6 key facts why checking your credit score annually through these institutions is so important for maintaining a clear financial picture:
1) It helps protect against identity theft.
2) It helps you stay up-to-date on any changes or mistakes made in your report.
3) It helps you understand where you stand in terms of borrowing capacity.
4) You will be aware of any potential fraudulent activity.
5) You will understand what can be done to get better loan terms or interest rates.
6) It provides you the information to take corrective measures if needed to improve your credit score.
One thing to take into consideration is that even if you do improve on your credit score or find out that your credit score is better than you had expected, it is important to make sure that your debt-to-income ratio does not remain elevated. Often times, individuals with decent credit scores end up accruing debt and sustain a high debt-to-income ratio, which negatively impacts the very thing a high credit score is supposed to improve. Both fortunately and unfortunately, all of our financial scores, ratios, and situations directly impact the other, so be sure to look at your entire financial picture, not just your credit score when making financial decisions.
There is a quote and a proverb I’d like to leave you off with. One is by Benjamin Franklin as he talked about indebting ourselves to pleasure and the other is an old German Proverb.
Benjamin Franklin stated, “Many a man thinks he is buying pleasure, when he’s really selling himself to it.” Although you may enjoy something in the moment, how long into the future will you be paying for that momentary pleasure? Lastly, the German Proverb states, “He who is quick to borrow, is slow to pay.” What comes easy and quickly is not always the best route for us to take.
*This is not financial advice. For educational purposes only.