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We recently discussed some easy ways to improve your credit score. But, as the saying goes, you can’t improve what you don’t measure. A good way to start your journey to financial freedom and becoming debt-free is by obtaining copies of your credit reports and knowing your credit score.
Three separate agencies keep track of your credit: Experian, TransUnion and EquiFax. To ensure you have a clear picture of your financial situation, you’ll want to obtain your credit reports from all three agencies.
How can you get your credit report for free? Beware of companies that promise a free credit report but slap you with hidden fees or require a one-year membership arrangement that costs money. We’ve found three ways to get your credit reports or credit score free, with no hidden fees and no strings attached.
After just a few minutes, I was addicted to this website. Credit Karma gives you you your current credit score, credit card and other loan offers based on that score. The site also offers a credit simulator that shows the impact different financial actions will have on your credit score.
Simply enter your name, email address and a password. In a few minutes (be patient), a verification e-mail arrives in your inbox. Then you have to answer a few more security questions, and you’ll receive your credit score.
The credit simulator (also free) lets you see how you can change your credit score by applying for new credit cards, paying down debt, getting credit limit increases, transferring balances, opening or closing cards and more. If you’re a finance research and education junkie like me, you’ll play with this feature for hours.
I learned that if I pay off all my credit card debt, I’ll raise my credit score by about 60 points. However, if I pay off only $1,000 of it, I can get the same result, according to the simulator. Since your debt to credit limit ratio is a big factor in determining your credit score, I wonder if this is truly accurate. To get myself into the “excellent range,” above 750, I’d have to pay off all my debt and have an on-time payment history for 2 years. Truly something to strive for. So you can see how much fun this website is!
When you register for the first time, you can set it up so you’ll receive monthly e-mail updates of your credit score – definitely a worthwhile service.
By law, every consumer is entitled to get a free copy of their credit report from all three credit bureaus once every 12 months.
AnnualCreditReport.com is the place to obtain them. Unlike other sites where you have to sign up for membership and provide a charge card number, AnnualCreditReport.com truly offers your credit reports for free, by mail or over the Internet. The only downside? You can only obtain each report once every 12 months.
The site is easy to use. You provide some basic security information, including your social security number, which will be encrypted. Once you’ve registered, you have the option to go to one of three sites: Experian, TransUnion or Equifax. You follow the registration process for each site, and view or print your credit report. When you finish at each site, you can click the link to “Return to AnnualCreditReport.com.
You may want to print each report for your records, since they are only available online for a limited time. Experian lets you return to the site to view your credit report at a later date by logging in with your report number. EquiFax permits you to view your report free for 30 days if you create an account with an email address, password and security question. I could not access TransUnion (I received my free credit report from TransUnion within 12 months), but I imagine it has a similar feature.
According to the Fair Credit Reporting Act, you can also get a free credit report if you are denied credit – but you can only obtain your report from the agency the lender used to determine your eligibility for credit. Your denial letter will include instructions on how to obtain your free credit report.
You are also entitled to free credit reports from all three agencies if:
- You are unemployed and plan to seek employment within 60 days
- You are receiving welfare or public assistance
- You are a victim of credit card fraud or identity theft, or suspect you may have been
You can visit the credit agency websites for more information on obtaining your free credit reports.