Your credit score can have a big impact on your financial life. The better your score, the more likely you'll get approved for loans and credit with better terms.
The most commonly used credit score is calculated using the FICO scoring system. Your FICO score is determined by a number of factors including payment history, amount of total credit, percentage of available credit used, new credit, and credit mix. Let's dive deeper into how to check your credit score for free and how your score is calculated.
How to check your credit score for free
Checking your credit score is easy to do and won't hurt your score. Here are some ways you can check your credit score for free:
Ask your credit card company
The simplest way to get a free credit score is through your credit card company. Many issuers offer this as a complimentary service to their customers. If you don't see it as an option online or on the app, call and ask about it.
Check your loan statement
Your credit score may also be available as part of a loan statement or monthly report from a financial institution. In many cases, you'll see it in the top right corner of the page. If it's not there, check the rest of the document.
Free credit score websites
There are also many free credit scoring sites on the internet that you can apply to. Experian, for instance, offers a free subscription that includes FICO score tracking. Other sites that let you check your credit score for free include NerdWallet and FreeCreditScore.com.
How is my credit score calculated?
There are five primary variables in calculating a FICO credit score. Some other scoring systems also take these factors into consideration. Here's how each of these factors can affect your credit score:
- Total amount owed: This is the total of all credit cards, personal loans, auto loans, mortgages, and other debt you owe. Credit scores also account for the percentage of available credit you use, so keep these balances down.
- Payment history: A history of making monthly payments on time is an important variable in calculating your credit score. Make sure to pay your monthly debt or credit card payments on time, as late payments can bring your score down.
- Length of credit history: The longer your credit history, the better. Your oldest account determines the length of your credit history, so be sure to keep this account open unless you have a good reason to close it.
- Overall credit mix: What types of credit accounts do you have? A mix of credit cards, loans, and a mortgage is considered balanced credit by lenders, and can have a positive impact on your credit score.
- New credit accounts: New credit accounts factor in for about 10% of your overall FICO score, so try not to open too many new accounts when attempting to fix your credit.
Other credit scoring systems may look at income, rental agreements, utility payment history, and job security. It's important to speak to potential lenders to understand how their scoring system works. Folks with lower traditional scores may qualify for an alternate scoring system.
The bottom line
It's easy and free to check your credit score using any of the methods listed above. You should check your credit score regularly to see if there's any room for improvement. If you boost your credit score, you may be more likely to get approved for the online loans and credit cards you want.
Notice: Information provided in this article is for information purposes only. Consult your financial advisor about your financial circumstances.
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Original Source: Can I Check My Credit Score for Free?
