Learning your credit score is a powerful tool in personal money management. Your credit score represents your history of repaying debts. Lenders assess the potential risk you pose for repaying a loan, your eligibility for a service and in some cases for employment. Your credit score also helps lenders assess the interest rate given to your loan. It is advisable to retrieve a copy of your credit score from each of the three
major credit bureaus to ensure accuracy.
What Is Credit History?
Your credit history is a comprehensive portrait of your financial history. This includes your history for paying bills on time versus late (30+, 60+, 90+ days), the amount of credit loaned to you compared to the amount used, whether the account is current or closed, and the types of credit you have (mortgage, auto, credit card, student loans, etc.). This history is calculated and given a credit score. There are several different credit scoring systems. Each system uses its own matrix for determining creditworthiness. For example a FICO score will evaluate the total amount of your debt in comparison with your assets and income.
What is Credit History Used For?
Your credit history is a critical tool lenders use to determine your eligibility for a loan, service, and in some cases employment. Loans and services include: mortgages, rental property, credit cards, utilities, automobiles, or bank accounts. Some employers require credit reports as a pre-screening tool prior to hire. Employers that run credit reports on their potential hires usually apply to positions where the individual is responsible for company's finances.
How to Get Credit Report
Obtaining your credit score is a very simple process. U.S. law permits individuals one free credit report per year. If you would like multiple credit reports, credit bureaus offer a paying service to retrieve your credit report. Credit bureaus and other financial management companies may also offer finance management tools to monitor and improve your credit score.
Credit Bureaus
The three main credit bureaus in the USA are: Equifax, Experian and TransUnion. Each bureau may use slightly different models in determining credit scores. It is highly advisable for individuals to order reports from each bureau to ensure correct information is unanimous between them.
Contact any of the three main credit reporting agencies via phone or the web to request a copy of your credit report. You will need to give your Social Security number, current street address and possibly additional identifying information.
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