Know Your Credit Score

If you’ve watched TV at all in the last three or four years, you’ve probably seen the commercials for the website FreeCreditReport.com. *sings* “F-R-E-E / that spells free / credit report dot com, baby…”

Anyway.

From those commercials you probably gleaned that it’s a good idea to know your credit report, and your credit score. What those catchy, clever commercials don’t tell you is that they’re advertising a credit report/credit score monitoring service, which most people don’t actually need.

But it IS a good idea to know your credit score, and the contents of your credit report, and to check them at least once a year, so I’m going to tell you how to do that.

The best place to go to get your credit report is AnnualCreditReport.com. There you can enter your information and get a free credit report from each of the three major, nationwide credit reporting agencies: Experian, TransUnion, and Equifax. Every American is entitled to a free credit report from each of the three credit reporting agencies once a year.

Along with offering your free credit report, each agency also offers a chance for you to purchase your credit score for around $7.95 (there’s also a $15.95 version, but I can’t remember what that includes above and beyond the $7.95 version). Each agency has a slightly different scale by which they calculate your credit score:

  • Equifax: 280-850
  • TransUnion: 501-990
  • Experian: 501-990

The general rule of thumb is the closer your score is to the high number, the better off you are.

If you have a good credit score, banks will be more likely to give you loans, you will be able to get better interest rates on those loans, you’ll get a better (read: lower) interest rate on any credit cards you decide to have, and you’ll have fewer hassles when renting apartments and signing up for various services (both my cable company and my energy company recently wanted to check my credit score so that they could decide if they wanted to charge me a registration fee or not).

Checking your credit report at AnnualCreditReport.com:

  1. Select your State.
  2. Enter your information, and don’t forget to check the box that states that you only want the last four digits of your social security number shown when you view your credit report.
  3. Select which of the three agencies you want your credit report from.
  4. Enter the information verifying your identity — they will ask you questions about the contents of your credit report which only you should know, like, “Your credit report shows that you lived at one of these addresses in the last five years, select the correct one…” and then you have to choose the correct answer.
  5. View and print your credit report (it’s handy to it to refer to later).
  6. Once you’re done with that agency, you are given the option to return to AnnualCreditReport.com to get the report for the next agency you selected, if you selected more than one.
  7. Decide if you want to purchase your credit score, and from which of the agencies.
  8. Pay for the credit score, and print that information as well.

You can get all of your credit reports at the same time, if you want to, just once a year, or you can decide to spread it out and get a different one every four months. I recommend the second option, because if gives you a way to monitor your credit report for fraudulent activity more than once a year.

It shouldn’t be necessary to get your credit score more than once a year, unless there is a huge discrepancy between your credit report from one part of the year to the next; such a discrepancy can affect your credit score, so it’s a good idea to check it again in the case of a major change in your credit report.

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