There are a number of different ways to get your credit score. But what’s the best way, and how often do you need to get one? Which one do you need? Let’s break it down.
But what’s the best way to get your credit score? How often do you need to get one? And which one do you need? Let’s break it down.
While your credit score is derived from information on your credit report, the two have very different rules governing them and your access to them. One of the biggest differences is that as a consumer, the Fair Credit Reporting Act gives you the right to free copies of your credit reports from each of the big three credit bureaus (Equifax, Experian, TransUnion) each and every 12 months.
Additionally, the bureaus are offering a free credit report every week through April 2021 as a result of the COVID-19 pandemic. These free reports are available at AnnualCreditReport.com.
However, consumers are not entitled to free credit scores under this act. The law says that while you have the right to ask for your score, you will have to pay for it. The main reasoning behind getting your report for free but having to pay for your score is that the FCRA was enacted to correct abuses by the credit reporting agencies, not the credit scoring companies.
Hence, if you want a score you may have to pay; however, any fee for a score obtained from the above website (and that one site only) must be “reasonable,” according to the act.
Where can I buy my credit score?
If you need your score because you are in the market for a new and specific financial product, like a mortgage, auto loan or maybe even a new credit card, I would suggest you purchase your FICO score, since that is the one most commonly used in making lending decisions.
The folks at VantageScore are trying hard to catch up with FICO’s sales volume and will offer you a free score through a number of websites and credit card products.
There are also many financial websites that offer credit monitoring for a monthly fee; these will typically give you your score and updated reports pretty much whenever you want them.
In my humble opinion, the VantageScore is a fine and accurate score. However, I’m not the one you’ll be applying to for a loan or product, and more of those guys use the FICO score.
How do I obtain my credit score for free?
While paying a reasonable price for your score is good, free is even better!
As credit scoring has become more important, widely known and talked about, many lenders have found that offering free scores is a great way to both get and keep customers.
Several credit card issuers offer free monthly scores and reports if you are their customer, and some offer free scores even if you aren’t. Examples of the latter are Capital One (CreditWise), Chase (Credit Journey) and Discover (Credit Scorecard). You can also get a free FICO score from Experian.
As noted above, some of these free benefits may give you reports from only one credit bureau and your VantageScore, as opposed to your FICO score. CreditWise uses your TransUnion report and Credit Journey uses Experian, but both offer VantageScore. The Discover Credit Scorecard uses Experian, but gives a FICO score.
A relative newcomer to the scoring world (as opposed to FICO), VantageScore has nevertheless proved to be a worthy addition. While there are a few key differences in how the scores are calculated, both will give the average consumer a good idea of where they stand in the credit world. And knowing where you stand is half the battle.
Yet another resource for free FICO scores is the FICO Open Access Program, which allows customers of certain lenders to view their scores and learn about the factors affecting them. Program participants include more than 200 banks, credit card issuers, auto lenders and mortgage servicers.
Which credit score should I get?
As I said earlier, if you need your score for a specific reason (like getting a mortgage) I would suggest that you find out if the lender will be using a FICO or VantageScore and try to get that one. However, since little in finance is simple, the scores you get may not be exactly the same as the one the lender will use.
No, this is not part of a plot to confuse and abuse you. Because much depends on which version is being used and you may not be able to find that out or even access that same version. FICO is now up to FICO 10 and 10T (which uses trended data), but earlier versions are still very much in use.
Lenders pay to use a scoring version. Here’s an example: several years ago, Joe’s Auto Sales paid to use the then current version of the FICO score, FICO 7. This score has served them well, so when FICO came out with FICO 8, then FICO 9 and now FICO10 and 10T, Joe did not purchase any of them, seeing no need to spend more money for a newer score when the old one served him well.
Your score also depends on which credit bureau report the scoring algorithm is applied to. As a rule of thumb, if the data is the same across all your credit reports, your scores should all be close. Don’t let a few points throw you; this is to be expected.
See related: How FICO’s new credit score changes will affect you
How often should I check my credit score?
Some people tell me that they check their scores daily, some monthly and some only when they are feeling lucky.
My advice is not to obsess about your score. However, if you’re planning a major credit purchase in the future I suggest that you check your score three to six months before you walk into the finance manager’s office. This will allow you to shop with confidence by giving you the time to correct any errors on your credit report that may be lowering your score or take some positive actions, like lowering balances, to improve your score.
Remember to keep track of your score!