Tracking Debt with Free Credit Scores

By on | General Debt & Loan Consolidation Information.

A credit score is a numerical representation of a consumer’s credit rating and a summary of the information on his or her credit report. Lending institutions, landlords, mortgage brokers, and employers utilize this pivotal number to gauge a prospective applicant or borrower’s creditworthiness and financial reliability, determine his or her eligibility for credit, and set the applicable interest rates and terms. Credit scores provide an indication of how much debt a particular applicant can comfortably assume. Lenders and banks rely on the credit score furnished by credit bureaus for deciding how much interest to charge to outweigh the risk of credit extensions and for making decisions regarding mortgages, loans, lines of credit, and credit card rates. Free credit scores are extremely useful for individuals seeking approval for credit cards or home mortgage loans or shopping for the optimal insurance rates. Bad credit places an obstacle in prospective borrowers’ path by preventing them from capitalizing on the lowest insurance rates or attractive rates on other categories of loans. Individuals with poor credit must fork out hundreds, if not thousands of dollars more than those with healthy credit. Good credit scores offer borrowers leverage to negotiate for the most favorable loan terms and obtain lower rates of interest. By maintaining a high credit score (i.e. 700+), consumers maximize their chances of getting approved for special credit card benefits and rates.

Typically, the range of credit scores runs from 300 to 850, with 350-640 constituting bad credit and 720-850 indicating excellent credit. The lower the number, the greater the risk a prospective borrower poses to a lender. Consequently, consumers with low credit scores are slapped with higher interest rates as a buffer against the elevated risk of default. Credit reports play a significant role in credit scoring systems. It is therefore imperative that consumers ensure the accuracy of their credit reports prior to submitting a loan or credit application. Free credit scores allow consumers to obtain direct feedback on lenders’ evaluations of their credit history and provide immediate insight on whether they need to exercise better credit management. To control their credit, consumers should first request a free credit score and report. Generally, credit reporting agencies are not required to furnish those free of charge. While the Fair Credit Reporting Act (FCRA) grants consumers the right to obtain annually a copy of their credit report from each of the three credit bureaus- Experian, Equifax, and TransUnion- it does not guarantee the same with respect to their credit score.

Identity theft protection and credit management services are the ones that typically provide the assessment of borrowers’ creditworthiness, also referred to as the credit score, at no cost. Numerous offers of free credit scores abound on the internet; usually, these are offered as part of a package. It is both safe and simple for consumers to obtain a free credit score and report online. Both independent websites and the three major credit reporting agencies extend offers of 3-in1 credit reports with three free credit scores (one per credit bureau), often with unrestricted online access to credit ratings. Consumers are simply required to validate their identity, usually by entering their account number. Upon confirmation, borrowers’ free credit scores and reports are instantly and securely transmitted to them through online channels. The credit bureaus often offer a trial membership that includes a 3-in-1 report from TransUnion, Experian, and Equifax, along with a free FICO score and helpful tips on how to boost one’s credit rating. Credit reporting agencies provide easy and fast online access to the free credit score.

Another way to obtain a free credit score is by applying for a credit card offer or signing up for a credit service such as a credit monitoring program which alerts consumers about changes in their credit profile or fraudulent activity. Credit card applicants might be offered a trial period- typically 30 days-to make use of free services such as access to their credit rating. To view their FICO score, they are usually required by the credit card company to submit their account number. Consumers may avail themselves of bank credit cards that provide gratuitous, unlimited online access to their credit score. Credit monitoring applicants who take advantage of a free trial membership receive a free credit score and report. Usually, credit monitoring services offer their customers continual access to their FICO score and credit report.