Business Credit
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Although each of the major credit bureaus - Experian, Equifax and TransUnion - are required to offer you a free copy of your credit report once a year, the report does not include your credit score. This essential number is a calculation based on factors in your credit report, that helps a lender predict your likelihood of repaying a loan on time.
Technically, each individual with a credit history has multiple credit scores calculated by different entities, in addition to the 3 calculated by the credit bureaus. Most of these scores are considered 'educational' - while you gain an idea of your overall creditworthiness, lenders do not use these to determine your eligibility for a loan.
The FICO credit score, developed by the Fair Isaac Corporation, is the most popular scoring system. According to the organization, 90 percent of lenders use FICO scores to evaluate applicants. Scores range from 300 to 850, with higher scores indicating higher creditworthiness. Credit scores calculated by the major credit bureaus are all roughly based on the FICO scale, and on the individual's credit report from that bureau.
All three credit bureaus helped develop and also provide access to VantageScore, a relatively new credit rating system. Although FICO's market share far exceeds that of VantageScore, use of VantageScore is growing. The company reports that nearly 1 billion scores were accessed in 2014 by more than 2,000 lenders, including 6 of the 10 largest banks. As of 2013, VantageScore also maintains a scale ranging from 300 to 850.
There are many ways to access your credit score, paid and free:
Credit Bureaus. The credit reporting bureaus (Equifax, Experian and TransUnion) offer the ability to access your credit score, as part of a monthly package that also monitors your credit report for changes. You can also pay $1 for a 7-day trial membership that includes access to your credit report. Be sure to cancel the subscription before the trial ends or you'll be charged the monthly fee. Purchasing your credit score exclusively, after accessing your annual free credit report from each of the bureaus, is also an option.
Directly from FICO. While it is not always possible to ascertain which credit score your lender will use, you can purchase all three FICO scores at once - one for each of the credit reporting bureaus. The scores may differ slightly according to the information provided by each bureau. Nevertheless, the information will help you determine your own creditworthiness and assess your probability of getting a loan at a good rate, even before you apply.
From your bank or current lender. At the urging of federal officials, many major lenders and banks have begun offering credit scores to their customers for free. Discover Card and Barclays customers, for example, have access to their credit score when they log into their account online. This year, JPMorgan Chase, Bank of America and Ally Financial, began offering free credit scores to some of their customers. Before looking into other options, contact your bank or lender to see if they offer a similar program.
Third party sites. There are other free services that will give you access to your credit score, typically in return for seeing offers from their advertising partners. Credit.com and Credit Sesame, for example, both offer free access to your credit score and a credit evaluation. You will receive offers from their advertising partners for mortgages, credit cards or other loans that you're eligible for, based on the information you share.
Many sites advertise a free credit score, but what they offer in reality is free access to your credit score for a specified period of time. If you're asked to enter your credit card information when you create your account, beware that the site may charge the card, unless you cancel before the end of the trial period.
Also be aware that you will have to enter personal information to get your credit score from the above providers, including your social security number, birthdate, address and other personal information. You may be added to the website's partners' mailing lists in the process.
Monitoring your credit score, either by accessing it yourself or purchasing a monitoring service package, will not hurt your credit. In fact, it is a good idea to keep track of your credit report and score by evaluating both periodically to ensure there are no negative or incorrect reports. While you do so though, be alert for charges which may not be entirely transparent.
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