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How many of you have seen all the television commercials on checking your credit score? It seems that accessing your credit score is just as confusing and frustrating as it is to check your credit reports.
In an article written by Glenda Wentworth, Colorado State University Family & Consumer Science extension agent and director in Eagle County, she reports that credit scores were once a mystical number you had to pay for or weren't easily obtained.
You may have noticed that over the last few years, many credit card issuers and other financial companies have begun to offer free credit scores to their customers. But be aware a credit score and credit report are two different financial documents.
Your credit score is meant to illustrate your creditworthiness. Generally, your credit score reflects the information in your credit reports. The three biggest credit reporting companies are Equifax, Experian and TransUnion. Federal law gives you the right to get a free copy of your credit reports from each of the three national credit reporting companies once every 12 months. Coloradans may get a second free copy from each company each year.
To order your free annual credit report from one or all of the credit reporting bureaus and to purchase your credit score, visit www.annualcreditreport.com or call toll-free 877-322-8228. You may also complete and submit an Annual Credit Report Request.
When you obtain your credit report, check it for accuracy. Look for mistakes in your name, phone number or address; check for loans, credit cards or other accounts that are not yours; reports saying you paid late when you paid on time; accounts you closed that are listed as open; and the same item showing up more than once such as an unpaid debt.
If you find errors in your credit report, contact the credit reporting bureau and explain what you think is wrong and why. Request the information be corrected or deleted. It is always good to include any copies of documentation that you have to support the dispute.
Your credit scores have a major impact on your financial opportunities. Credit scores are used by lenders to determine your credit risk and help predict the likelihood of you paying your credit obligations as agreed. It is also used in a loan approval, the terms you are offered or the rate of interest you will pay for the loan. A higher credit score may mean a lower interest rate, resulting in dollars saved over the course of the loan.
A credit score is a "snapshot" of an individual's credit history at a particular point in time. The good news is you are increasingly able to see your credit score from a variety of websites. Some websites offer credit scores for free in exchange for signing up and paying for a monthly credit monitoring service or to market their services to you.
A number of credit card companies offer your credit score for free if you have an account with them. Just remember, these credit scores are estimates, not the actual score lenders will use. However, they do give you a sense of where you are financially at that point in time.
Credit scores play a crucial role in your financial life. Be sure to check and update yours often.
Elbert County Extension is a cooperative effort between CSU Extension and Elbert County government. Sheila G. Kelley is the Colorado State University extension director for Elbert County. She can be reached at firstname.lastname@example.org.
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