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If you’re trying to improve your credit, or going to be applying for a new credit card, personal loan or mortgage in the near future, now is a good time to begin monitoring your credit score. As your credit score is an assessment of your risk to lenders, it’s important to be sure that it is accurate and prevent it from dipping too low.
With a plethora of television and Internet ads for credit score services, it’s easy to become overwhelmed when deciding which to choose.
Many services advertise that they are free, but most have strings attached. As most will charge a fee if you stick with them beyond a free trial period, it is best to ensure that you get the most value for your money.
So, what should you look for in a credit score service? How much will your credit score REALLY cost you? Let’s take a look at some of the premium credit score services and filter out the best from the rest. Also, we’ll take a look at the three major credit bureaus that are used by lenders the US.
Comparing Credit Score Services
Verdict: We currently recommend CreditReport.com which will give you your current free credit report from all three credit bureaus along with identity theft insurance, credit analysis and automated email alerts.
Below is a table illustrating a side-by-side comparison of a few popular credit score services.
Note that with Equifax, I went with the Equifax Complete Advantage Plan. They also offer more expensive options that have more bells and whistles.
Also, note that you may not qualify for identity theft insurance if you are a resident of New York State. Check with your chosen provider prior to enrolling.
ServiceFree Trial PeriodMonthly FeeMinimum SubscriptionBureaus CoveredIdentity Theft InsuranceCredit AnalysisEmail Alerts
|My FICO||10 days||$14.95||3 months**||Equifax||None||Yes||Yes|
* Must pay $1 for a credit report to receive other services for free.
** May be cancelled at any time during the free trial period.
So, we can see that the listed credit monitoring services are closely matched in most categories. Which is the best to go with?
Right off the bat, I recommend eliminating GoFreeCredit and MyFICO from the list. GoFreeCredit and MyFICO do not offer identity theft insurance, leaving you at a higher risk if things go wrong. Also, with MyFICO, you’ll be stuck paying a monthly fee for at least three months if you don’t cancel during the free trial period.
Out of the remaining four, I recommend going with CreditReport.com or FreeCreditScore.com.
They charge a competitive monthly fee and edge out the offers of both Equifax and TransUnion with double the amount of identity theft insurance. Also, their website is more user-friendly than the others that I’ve tried.
However, after reviewing all of the listed providers, I don’t think that you’ll be taking too far of a step down if you go with Equifax or TransUnion, so consider them if you are displeased with the others for any reason.
Understanding The Big 3 (Credit Bureaus)
Let’s begin the more in-depth portion of this guide a look at each of the three major credit bureaus (Equifax, Experian and TransUnion).
Each bureau does things a bit differently and determines your score based on a different formula. However, their scoring models are trade secrets – and, you guessed it, they don’t give me access to them!
Despite this, there are a few factors that are generally considered in your credit scores. Those are as follows:
- Payment history
- Level of debt
- Age of credit history
- Types of credit
- Credit inquiries
- Available credit
Some or all of these and more may be considered when your credit score is determined, so keep them in mind if you are closely managing your score.
1. Experian – The Largest Credit Bureau
Experian is the largest credit reporting company that operates in the US. It is based out of Dublin, Ireland, but operates on all major continents.
In the US, Experian collects data on 215 million people and 450 million vehicles. In other words, chances are that Experian has some information about you in their files.
If you rent a dwelling, Experian probably has data on that. They purchased RentBureau in 2010, which collected rental payment histories on over 7 million US residents. Experian began tracking this data in their credit reports in January of 2011.
2. Equifax – The Oldest Credit Bureau
Equifax is the second largest company in the US credit reporting market. It was founded in 1899, so they’ve been getting information about people for a while. It is based out of Atlanta, GA.
Although they operate primarily in the business-to-business sector, they still collect plenty of information on individuals. The company gathers information on over 400 million people worldwide. That means that they have the dirt on roughly 1 out of every 17 people on Earth.
As for their potential involvement in your life, they may sell they information that they collect about you to banks, landlords or anyone else that has a financial interest in your life. The same goes for the other credit reporting companies.
3. TransUnion – Big in The United States
TransUnion was founded in 1968 and is the third largest credit bureau in the United States. It is based in Chicago, IL and has 250 offices in the United States. The company also has 25 offices abroad and has a presence on 5 continents.
Like the other companies in this field, TransUnion probably has a lot of information about you on file. They also sell this information to potential landlords, employers, creditors and so on.
Key Factors In Choosing a Credit Score Service
When you visit a credit score website, you’ll probably see a lot of advertising and information. However, you may not know what really matters and what is just fluff. Below are a few key items to look for when choosing a credit score website.
Free Trial Period: Most credit score services offer a free trial period. Look for this key feature in any service that you consider, as you can walk away without paying anything if you don’t like the service. I’d strongly recommend looking elsewhere if there is no free trial period, as you’ll be on the hook for at least 1 month’s payment if you decide to cancel quickly.
Fees: As far as fees are concerned, expect to pay between $14.95 and $19.95 per month. If you can find something below this range – great! If a service costs over $19.95, look elsewhere unless you are blown away by their offer.
All Three Credit Reports and Scores: As each credit bureau reports items differently and has different scoring methods, it is wise to have access to all of the available reports and scores. Look for a service that offers access to all 3 of these at least once per year.
Credit Analysis: Unless you are a financial guru, you may have difficulty understanding what your credit reports and scores mean. Services that offer credit analysis should stand out to you, as they can offer credit tips that can save you tens of thousands of dollars in interest expenses.
Alerts and Notifications: A good credit score service will alert you of significant changes in your credit report. For example, if your credit card provider reports that you have a $5,000 payment that is 90 days late, the chosen service should notify you of this.
Additionally, notifications of significant changes in your credit score are fairly common among credit score services. If your credit score drops by 50 points in a month, you’ll probably want to know about that. Make sure that your chosen credit score service offers this feature.
Identity Theft Insurance: Some credit score services offer identity theft insurance as part of their package. While a good service should be able to help you detect and stop substantial damage from identity theft, insurance against it is a major bonus to have. Just think of the headache that you’d avoid if an identity thief spends $25,000 in your name and you know you won’t have to pay a dime because of it.
Each credit score provider has it’s pluses and minuses, so be sure to thoroughly review each offer before making your choice. This guide should help point you in the right direction, but the service that works best for you will depend on your financial situation. Find the site that offers you the most peace of mind and value for your money, as your credit score – for better or worse – is a major piece of your financial life.