Your credit score is unarguably one of the most important factors in your financial life. Most times when people talk about your credit, what they are referring to is your credit history. Your credit history describes how you use money:
- How many credit cards you have
- How many loans you have
- If you pay your bills on time.
If you have a credit card or a loan from a bank, then you have a credit history. Companies collect this information about your loans and credit cards.
Companies also collect information about how you pay your bills. They put this information in one place which is in your credit report.
What is a Credit Report?
Your credit report is a summation of your credit history. It lists:
- Firstly, your name, address, and social security number
- Secondly, your credit cards
- Thirdly, your loans
- Also, how much money you owe
- If you pay your bills on time or late.
Why Should You Have a Credit Report?
Lenders would always want to know about you before they lend you money. Just like you would want to know more about someone before entrusting your business to them, so also do the lenders. Businesses review your credit report to know more about you. They decide if they want to lend you money, or offer you a card. Sometimes, employers take a look at your credit report when you apply for a job. Cell phone companies and insurance companies on the other hand look at your credit report too.
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Who Makes Your Credit Report?
A company known as a credit reporting company is in charge of collecting your information. There are three big credit reporting companies:
These are the companies that write and keep a report.
Can You See Your Credit Report?
You have the access to get a free copy of your credit report every year. This implies that one copy from each of the three companies which write your reports.
The law states that you can get your free credit reports if you:
- Call Annual Credit Report at 1-877-322-8228 or
- Go to AnnualCreditReport.com
Now some persons may say you can get a free report on another website, they are probably not telling the truth.
What is a credit score?
A credit score is a three-digit number that is based on your credit history. However, it does not come with your free credit report unless you pay for it.
A high credit score signifies that you have good credit. A low credit score on the other hand means that you have bad credit. Different companies have different scores. Low scores are around 300 and high scores are around 700-850.
Do You Need a Credit Score?
Knowing your credit score is very important. A credit score is a number that matches your credit history, thus if your history is good, your score will be good. You can get your credit report for free.
It actually costs money to find out your credit score. Sometimes a company might say the score is free, but if you look closely enough, you might discover that you signed up for a service that checks your credit for you. These services charge you every month.
Thus before you pay any money, ask yourself if you need to see your credit score. Even though it might be interesting, but ask yourself is it worth paying money for?.
Where to get a free credit report
You can get your free credit report from Annual Credit Report. This is the only place you can get your report. You can get it online at Annualcreditreport.com, or by phone at 1-877-322-8228.
You can get one free report from each credit reporting company every year. This means that you can get three reports each year.