What is a credit score? Well, it’s a number that represents your credit value. They can also be referred to as credit ratings and usually range from 300-850. Sometimes, credit scores are known as FICO Scores, made by Fair Isaac Corporation.
Borrowing Money: Check Your Credit Score for Free
Your credit scores tell financial institutions how responsible you have been with your credit over the years. Potential lenders can legally ask for this information to weigh the risk of lending you money.
Whether it’s a loan application, checking for mortgage options, or just applying for a new credit card. When dealing with financial institutions, you will surely come across the credit score question. Understanding your credit score is very important for several reasons, including those mentioned above.
What can lenders see?
Your credit score consists of the details of your previous and present credit accounts. It also notes each time anyone requests your credit report even when your accounts are forwarded to a collection company. Financial problems that are attached to this record include bankruptcy and foreclosure.
What does having a credit score mean?
A credit rating is a numeral representation of your past credit history. Credit scores are comprised of five components: payment history (35%), amounts owed (30%), length of credit history (15%), how many types of credit in use (10%), and account inquiries (10%).
Also, take note that, the higher your credit score, the lower your risk to the potential lender.
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Here is how to find your credit score number:
1) Choose a legitimate source
Currently, there are numerous places you can turn to for your credit score. However, it is vital to know that you can get this number free of charge. Avoid websites that charge you to provide your credit score. Some sites even offer tips on how to boost a credit score, so be on the lookout.
2) Check with your bank
Part of looking for a trustworthy source needs to include reaching out to the bank. Many banks offer free credit monitoring and access to your credit rating as part of their general services, so confirm with them from the beginning.
3) Check with your credit monitoring service
If you pay for monitoring your credit or identity theft, make sure they offer your credit rating as part of the package deal. Bear in mind that you do not need to register for a paid service primarily to check your credit rating.
4) Pick a site/app to get your score for free
You can gain access to your credit score anytime for free from various websites such as Credit Karma or Credit Sesame, to state a few. These websites offer close to accurate estimations of your rating. You can also check your credit as many times as you want without the danger of affecting your credit.
5) Create an account and keep track
Lastly, once you have understood the necessary criteria, it is time to get started. Begin the process by signing up and filling out your personal information. Once your account is set up, you can keep track of your score as long as you have access to the internet.
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Once you receive your credit score, and the score is high, you can go ahead and confidently borrow money.
