People who get shocking news when they apply for a loan and see an abysmal score should not just take the bad news passively. They should do all that they can to find out what went into their poor rating and check their credit history. Many discover that errors were made on their credit reports, errors that unfairly affected their scores and dropped them into poor risk categories in which they do not belong.
However, if you have questions about your credit history and score, you need to realize that it will be much easier to check your history than it will be to know your score.
Accuracy of Credit History Checks
The Fair Credit Reporting Act has mandated that consumer reporting agencies give people records of their credit report every 12 months. As you get a look at that report, check the credit history for errors, omissions and other inaccuracies to be sure it reflects precisely what you have done with credit in the past year. Even mistakes as simple as incorrect addresses can impact your score.
What the Act did not require is that credit scores be divulged to consumers free of charge. No matter what the sometimes-cute credit score commercials on television seem to indicate, you will probably have to pay a small sum to see a report that includes your score.
That score is kind of a cruel dictator. It does not take into account all of the details that go into a thorough credit report, and it gives great weight to what has occurred recently, times in which many people have huge medical bills, have been laid off from a job, etc. In other words, a credit score does not reflect 15 years of solid credit use as much as the past year of nightmarish circumstances that you have possibly undergone.
Services to Check your Credit History
There is one way to check credit history and get a score, too, free of charge. You can sign up for a monitoring service trial period and then cancel when the period ends. It shouldn’t be hard to find one of these services that check credit history and will give you an official FICO score.
Many people have turned to the Fair Isaac Corporation for help, the very organization that created the FICO score used by many lenders. If Fair Isaac doesn’t seem fair or convenient for you, sign up with Equifax, Experian, TransUnion or other similar companies.
Humans being who they are, many people lose track of when the trial period ends and have to pay for membership with these organizations to retain access to their scores. In light of that, don’t check your credit ratings beyond the free report that you are entitled to each year unless you are applying for a loan; this will give you a good idea of what your payments will be as you think like the lender in light of your score.
Another advantage of getting your score is to see if you linger between the all-important tiers that lenders use. If you are on the borderline of a higher category that will give you a better loan over 30 years, for instance, wait a few months and boost your score. You will be glad that you did decades from now.