- Your credit score is a numerical representation of your credit history and creditworthiness.
- There are a variety of credit scores offered via several scoring brands, like FICO and VantageScore.
- Checking your credit score and credit history can help you improve your finances and detect fraud.
Your credit score represents your likelihood to repay debts, be they credit cards, a mortgage or other kinds of credit. Creditors use your credit score to get a sense of how well you handle debts: how quickly you repay them, whether you've missed payments, your credit history length and any recent credit activity. Good credit scores can open up opportunities for borrowing money, such as through loans and credit cards. Lower scores may not prevent you from borrowing but could result in higher costs or interest rates.
It’s critical you know how to check your credit score occasionally to make sure it’s accurate. Doing so can help you work on your credit or detect fraudulent activity in your name, if need be. It’s also helpful to know your score before seeking out a loan so you can better understand your borrowing options. If you’ve ever asked yourself “how do I check my credit score?” here’s everything you need to know.
1. Choose between credit score or credit report
Your credit score and credit report are two different entities, even though lenders use both to help them understand your track record with borrowing. A credit score provides an at-a-glance method of checking your credit information, while your credit report provides a detailed look at your history of borrowing and repaying loans.
You can request a free copy of your credit report from each of the major credit bureaus (Equifax, TransUnion and Experian) at annualcreditreport.com. You can obtain a free credit report from each bureau once every 12 months; some offer free reports more often. If you just want to know your credit score, a few options are available. Some financial institutions also provide clients with the ability to access their credit score as part of their account. Check with your financial institution for additional information.
Tip: Regularly monitoring your credit report could help you quickly catch any inaccuracies or fraud. A regular review of your credit report could help you recognize any unexpected activity, which may suggest your financial or personal identity has been compromised.
2. Choose a credit scoring tool
You can receive your credit score from a few different sources. These include:
- Financial institutions
- Credit reporting agencies
- Credit scoring companies
Some of these options may provide you with a free credit score, whereas others may charge you for this information. Also bear in mind the different types of credit scores: VantageScore and FICO scores are two different metrics borrowers can use to evaluate their creditworthiness. Your score may differ between sources: each scoring formula uses different formulas and figures to calculate your score.
Tip: Many people want to conduct credit monitoring but might be afraid that checking their credit score will lower it. Simply checking your score won’t lower it since doing so is considered a soft credit check. This contrasts with hard credit checks, which can affect credit scores. Hard credit checks are typically triggered when you apply for credit and a lender must evaluate your creditworthiness.
3. Analyze your credit score
Once you’ve accessed your score, you can begin figuring out what your credit score means. Your credit score is a number on a set scale of creditworthiness. The higher your number, the better your score and the more likely you are to be approved for a loan if you were to apply for one.
Credit scores are calculated based on your credit history and how each reporting agency calculates these data.
A credit score makes it easier for lenders to evaluate your creditworthiness without necessarily diving into your credit history itself. This also helps you receive a decision on your credit application more quickly in many cases.
Tip: Credit scores allow lenders a quick glimpse into your credit history, helping them determine whether you’re a good candidate for a loan.
4. Determine next steps
Your credit score doesn’t just help lenders learn about your track record with borrowing money. Knowing your credit score can also help you better understand your own finances. If you already have a good credit score, you can focus on maintaining good credit habits, which can help you maintain or potentially improve your score.
Although it’s a good idea to check your credit score and history at least once a year, there’s no hard and fast rule about how often is too often. The good news is that you can check your credit score as often as you like. If you decide to check your score and, several months later, check again before getting a loan, that’s fine. In fact, it’s often helpful to check your credit when you prepare to borrow money, be it through a loan, credit card or mortgage.
Tip: Building and maintaining a good credit score can potentially help you secure better interest rates and other benefits from lenders. The more confidence your lender has in your ability to pay back a loan, the more beneficial your terms are likely to be.