Friday, June 25, 2021

How to Check Your Credit Score for Free

By: Dr. Daniel B. Prescott, Jr.

Most of us are on some form of social media these days. I’m sure many of you reading this have a Facebook account, a Twitter account and maybe even an Instagram account. Posting updates is a way for you to share what’s going on in your life with your friends and family. People typically share photos, stories they’ve read and even inspirational quotes. As soon as the post goes live, what happens next? We sit back and count the “Likes”, “Retweets” and “Comments” that come rolling in, tallying up the score as a form of bragging rights. “I got 125 likes on my last Instagram photo!”

What if we cared the same way about the important things in life? What if we put the same effort into “Liking” a good credit score, earned by making smart, financially literate choices? Wouldn’t that be worth bragging about too? I think so, and I’m here to tell you how to begin. Because you can check your credit score for free.

 

First, what is your credit score?

So what is a credit score defined? It’s a number that represents your creditworthiness. Scores can also be referred to as credit ratings, and sometimes as FICO(r) scores, published by the Fair Isaac Corporation, and typically range from 300 to 850. A score of 300 is bad-really bad. And 800 is about as high as you can get. The U.S. consumer average is 637, which isn’t great, but workable.

If you don’t have even a passing familiarity with your own credit score, it’s time you did. How many of you could make an educated guess on your own score right now? Would it be below 600? Above 600?

Your credit score should be taken seriously because it defines your ability to borrow money for important things in life like buying a car or even securing a mortgage on a house or an apartment of your own. A good credit score means you’ll borrow money at a lower interest rate, saving you tons of money over the lifespan of a loan. A good credit score also means you can secure and open a line of credit. Simply put, a good credit score means you’re a safe risk to take when borrowing money for the things that matter in life.

Here’s an added bonus-your credit report can also identify irregularities in your financial history which can often be rectified to your benefit going forward. For instance, you may have an outstanding bill which you reconciled, but has yet to be removed. With proper documentation, you can wipe the slate clean. Credit reports are also good for turning up fraud and identity theft.

Here’s how to find out where you stand. Consumers in the U.S. are entitled to one free credit report per year, but it must be requested from any of the big three credit reporting agencies. These include TransUnion, Experian and Equifax. But you can get started as simply as going to the website: www.annualcreditreport.com or by calling their toll-free number at 877-322-8228.

You should also know that, in addition to getting a free annual credit report, you’re also entitled to see your credit report within 60 days of being denied credit. Your credit report is also free of charge if you are on public assistance, unemployed, or if your report is inaccurate.

 

Can you improve your credit score?

If you make smart choices with your money, you should be pleasantly surprised with your credit report score. These choices include the following: having a stable form of banking and positive account balances. Paying all of your bills on time or within the stated grace period. Resisting the urge to open unnecessary lines of credit, such as retail stores. Paying off the balance of all credit card balances each month. Someone who has done these things consistently over a period of time can expect to receive a score of 680 or higher.

If you’ve made poor financial literacy choices in the past, it’s never too late to begin the clean-up process. But you must begin by ordering your own credit report and seeing for yourself what the current results look like. Think of it this way-if you’re sick, you go to the doctor, get medicine and get well. Treat the process of discovering your credit history the same way. Initially, you may not like what you see, but ignoring it won’t solve the problem. Once you know the score, you can begin working toward building it up.

If you contact Transformance and make an appointment, we can walk you through the process step-by-step. We’ll pull your report, assess the results and work with you to identify the reasons your score is impacted, while creating an action plan for improving it. Transformance is always available to answer your questions and assist you, either through our website or by calling 800-249-2227.

Dr. Daniel B. Prescott, Jr. is the interim CEO of Dallas-based Transformance Inc., a fully integrated financial services capability nonprofit. He can be reached at dbprescott@transformanceusa.org

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