Learn the Best Way to Monitor Your Credit Score & Get a Full Credit Report

A poor credit score may lower your chances at receiving approval for home loans, new credit cards and more.

Your credit score is different from a full credit report because it provides you with slightly different information.

For instance, a credit report details your entire credit history, your existing lines of credit, loans and whether you have ever filed for bankruptcy or undergone foreclosure.

In contrast, a credit score offers fewer details and may only provide you a report from one of the three major reporting companies.

Your score may also be calculated differently from company to company. Keep in mind that both your score and your report are offered for free by the federal government and certain reporting companies, respectively.

You may never need to pay for either service if you research different programs and only use the ones that are free.

However, you may consider paying for a report every so often if you want more frequent updates.

How to Check Your Report from All Three Reporting Companies

The three major credit reporting bureaus in the United States are Equifax, Experian and TransUnion.

All companies will gather similar information about you, such as mortgages or loans in your name, open credit cards, banking information and more.

However, each company uses its own formula to create your report, which means that your reports may not be the same.

If you are applying for a loan, lenders may check your credit with one, two or all three bureaus.

It is therefore important to monitor your report with all three companies.

You are entitled to a copy of your report from Equifax, Experian and TransUnion once per year.

However, the federal government does not recommend going to each of these sites individually, as you may end up paying a fee for your reports.

Instead, you may visit the federal government’s reporting website, which will provide you with information from all three companies on the same report.

Where can you find a free credit report?

You may obtain a copy of all three reports from the Annual Credit Report website, which is the only site to have authorization from the federal government.

This website provides tips on how to spot identity theft through your report and allows you to update your information, such as a new address or a recent name change.

You may also request a free copy by calling the Annual Credit Report phone number or mailing in a request form. It usually takes 15 days to receive your report by mail.

In order to request a report, you must submit required information to prove your identity.

This includes your name, address, Social Security Number (SSN) and date of birth.

You may also be required to answer questions about your loans, mortgage payments or other forms of debt to ensure you are the right person asking for this information.

You may receive a free report once every 12 months or after you have recently been denied approval for a loan, mortgage or credit card.

If your application for credit was denied, you may receive a free report if you request one within 60 days. If you request a report outside of these circumstances, you will most likely pay a fee.

You may also call the nationwide phone numbers for Equifax, Experian and TransUnion to buy copies of your individual reports.

While this will inevitably cost you more money, it may appeal to you if you want to monitor your reports more consistently, as you can then spread out your requests during the year.

Learn About the Benefits of Monitoring Your Credit Report

By regularly monitoring your report, you will be able to update potential errors more quickly. In addition, you will be better equipped to recognize the signs of identity fraud.

Identity thieves are known for taking your SSN and banking information to open a new credit card under your name.

Then, they typically spend an exorbitant amount of money using the card and never pay it back.

This can have a very negative impact on your credit score and may affect your chances of receiving loan approvals in the future. It may even affect your ability to get a job.

Information that Affects Your Credit Score

The three major credit reporting companies do not often provide specific details on how they determine your score.

However, the following information is usually considered the most important for score calculations:

  1. Payment history
  2. The debt you owe versus the credit that is available
  3. The length of your credit history
  4. New accounts that were recently opened
  5. The types of credit accounts you already have

Your payment history is listed as the most important factor because it is usually the most reliable proof that you will make your payments on time.

Your available credit also matters because a large amount of debt may alter your ability to make other payments.

In general, it is recommended that you do not use more than 30 percent of your total credit at any given time.

The less important factors of your credit report are the types of accounts you have open and how many there are, though these still have some impact.

How Checking Your Credit Score Affects Your Credit Rating

Checking your credit score will not affect your rating or negatively impact your score. This is often referred to as a soft inquiry, and potential employers and credit card companies may perform them as well.

An employer may perform a soft inquiry as part of a background check. Depending on the reporting bureau, soft inquiries may or may not be recorded on your record.

In contrast, a hard inquiry is a more involved credit reporting request performed by financial institutions, lending companies or housing associations, if you apply for an apartment.

These are recorded on your credit report and do lower your score by a few points. If you have multiple hard inquiries on your report in a short amount of time, your score may drop more than usual.

Having multiple hard inquiries often implies that you are applying for large sums of money at once.

How to Improve Your Credit Score

Ultimately, the only way to truly improve your credit score is to make regular payments and meet all your deadlines.

If you already have a very large amount of debt, try to prevent yourself from using credit cards that have outstanding balances.

It is also wise to give yourself a goal date for when you want to become debt free.

From there, you may work backwards by calculating the amount you would need to pay each month to become debt-free on that date.

Though it may take a long time for your credit score to improve, it will solve many of your monetary issues and make you a more attractive customer for mortgages and loan programs.