Checking your credit score is a valuable way to learn more about your financial health and can provide useful information about whether you’re likely to qualify for a loan or credit card.
We’ll walk you through some of the easiest ways to check your credit score, as well as the top reasons to monitor your score regularly so you can take advantage of your opportunities.
3 ways to check your credit score
Consumers have several options for accessing their credit scores beyond simply visiting the three major credit bureaus. Here are three ways to check your credit score and stay on top of your finances.
Free Credit Score Website
One of the best ways to check your credit score for free is to visit a free credit website. These websites generally offer access to your credit report, credit score and/or credit monitoring and are updated anywhere from weekly to monthly. There is no fee to sign up for basic credit score updates. However, some websites offer more advanced services for a monthly fee.
Your credit card provider
Many credit card providers also offer cardholders the ability to check their credit scores for free. Often, these tools include access to view your score history and see what led to recent changes.
Some providers also allow customers to forecast how their scores reacted to variables such as on-time payments, credit limit increases and obtaining a mortgage.
Note, however, that most providers require cardholders to opt in to this service, so be sure to sign up if you want access to your score.
Nonprofit credit counselor
Credit counseling is a service intended to help consumers get out of debt. This may involve providing money management advice, creating a budget, working with creditors, developing healthier financial habits, and helping borrowers come up with a plan to repay their debt.
Paid credit repair and debt settlement services can negatively affect your credit score in the long run, but nonprofit credit counselors are a safe and reliable way to understand your credit score and improve your finances.
How to Interpret Your Credit Score
Checking your credit score is easy, but simply knowing the number is not enough. To make the most of your score and improve it, you need to interpret your score and your credit report as a whole.
This involves understanding the five credit score ranges and what each means to lenders. FICO scores fall into the following ranges:
Poor (300 to 579). A score between 300 and 579 is well below the national average FICO score of 711. Because of this, lenders consider borrowers with low credit scores to be risky and are less willing to extend credit to them. That said, some lenders offer bad credit personal loans designed specifically for borrowers with low credit.
Fair (580 to 669). Still below the national average, fair credit scores between 580 and 669 generally qualify borrowers for loans. However, these loans or lines of credit are more likely to have higher interest rates, lower limits, and shorter terms. Borrowers with fair credit may be able to access better terms by choosing a secured loan that poses less risk to the lender.
Good (670 to 739). If your score is near or above the national average, lenders consider you to be in the good range. This means you have less loan risk and are more likely to qualify for favorable terms.
Very Good (740 to 799). An above-average credit score tells lenders that a borrower is reliable and more likely to make payments on time. For this reason, borrowers with a very good credit score generally have access to more competitive credit cards and better loan terms.
Exceptional (800 to 850). Borrowers with exceptional credit are more likely to be approved for larger loans, lines of credit and generally receive the most competitive interest rates.
Relevance of Checking Your Credit Score
It makes it easier for you to understand your financial situation. Without knowing your credit score, it is impossible to fully understand your financial circumstances. Having a comprehensive understanding of your score can help you decide if it’s a good time to buy a home, apply for a car loan or make other major purchases.
It makes it easier to improve your score and qualify for better rates. By understanding your score and how it was calculated, you can take strategic steps to improve your credit score over time, or build it for the first time. In fact, many scoring websites allow users to simulate changes in their score based on various factors, such as on-time payments, additional payments and new credit applications.
Allows you to compare financial products based on eligibility requirements.
Knowing your credit score can give you an idea of whether you’re likely to qualify and whether it’s worth applying for. In addition, lenders often offer a personal loan pre-qualification process that allows potential borrowers to see what kind of interest rate they might qualify for based on their income and creditworthiness.
It may include red flags for fraud. Regularly checking your credit score makes it easier to spot unusual activity that could indicate fraud. By recognizing a large, unexpected increase in your credit usage soon after it occurs, you can file a dispute and recover your credit more quickly.
