by Dan Friedman
If you’re planning to open a new credit card or purchase a new home or car anytime soon, you’ll want to have a good overview of your most recent credit report. Here’s what you need to know about your credit report—and how to get one for free.
Why do I need to check my credit report?
Financial institutions refer to your credit report when you apply for a new loan. A history of late or defaulted payments can make it more difficult to secure a loan or low interest rate. It’s equally important to check for any fraudulent activity, like any loans or credit cards that don’t actually belong to you. This might be a sign of identity theft, which can damage your credit.
What’s the difference between a credit report and a credit score?
A credit score is a number between 300 and 850 that’s determined by your credit report. It is used by banks and other financial institutions to determine how much money they’re willing to loan you. It can also affect the type of interest rate you’ll receive. While a low credit score doesn’t necessarily mean you won’t be offered a loan, it could translate into a higher interest rate, making the loan more difficult to pay back.
How do I get a free credit report?
The best way to get your free credit report is to visit www.annualcreditreport.com. You’ll need to provide your name and address, along with more personal information like your birth date and Social Security number (SSN). Normally it’s not a good idea to provide your SSN to an online service, but it’s safe to do so in this case. If you’re uncomfortable giving out this information online, you can always call 877-322-8228.
What about my credit score?
While you can get an annual credit report for free, there’s no easy way to see your actual credit score unless you’re willing to pay for it. Even “free” websites require you to sign up for a $20-per-month credit monitoring service before you can view your score. You can drop out of the service after a set time to avoid paying this fee, but this could end up being more trouble than it’s worth.
How do I get my credit score?
If you really want to see your credit score, you can purchase it from the three major credit agencies—Equifax, Experian, and TransUnion—at www.myfico.com or through each agency’s website.
Friedman is an instructional designer with GCFLearnFree.org, a program of Goodwill Community Foundation and Goodwill Industries of Eastern North Carolina Inc. For more information, visit www.GCFLearnFree.org/online-money-tips/.