Free Credit Report and Free Credit Score

What is a credit report and credit score?

A credit report is a report containing information about your identity, credit relationships, some court actions, consumers statements and previous inquiries into that file. Credit reports are compiled by agencies that gather information about your credit relationships known as credit bureaus. Currently there are three major credit bureaus.

Credit scoring is a system lenders use to help determine whether to give you credit (car loans, credit cards, home mortgages, etc.) that is closely associated with your credit report. Information about you and your credit experiences, such as your bill-paying history, the number and type of accounts you have, late payments, collection actions, outstanding debt, and the age of your accounts, is collected from your credit application and your credit report(s).

Using a statistical program, creditors compare this information to the credit performance of consumers with similar profiles. A credit scoring system awards points for each factor that helps predict who is most likely to repay a debt. A total number of points, a credit score, helps predict how creditworthy you are, that is, how likely it is that you will repay a loan and make the payments when due.

Why is it important that I obtain a copy of both my credit report and credit score?

Since your credit reports are an important part of many credit scoring systems, it is very important that you make sure that your credit reports are accurate before you submit any type of credit application (including credit cards). Some experts estimate that as much as 50% of credit reports contain at least one inaccuracy. Thus, consumer advocacy groups recommend that you obtain a copy of your credit reports at least once a year to prevent fraud and to insure that your report is accurate.

There are actually three major national credit reporting bureaus or agencies and we recommend that you obtain your credit report and your credit score from EACH of the three major bureaus. Since creditors (i.e. credit card companies, mortgage companies, etc.) do not report your credit history to the same bureaus, each bureau will often contain different information regarding your credit history. For example, some creditors may report to one bureau, while other creditors may report to all three bureaus.

What is a good credit score?

A high credit score is often the key to obtaining the most attractive credit cards (a credit score over 700 will increase your likelihood of getting approved for the best credit card rates, benefits, etc.). A high credit score will also help you to obtain the best rates on other types of loans, as well as the lowest insurance rates.

The following graph will give you an idea of how card issuers view your credit score. This is meant only as a general guide - each issuer has their own credit guidelines.

Why is it important to know my credit score? What is a good credit score? What score do I need to qualify for an attractive credit card?

Credit scores typically range from about 300 to 850. Consumers with high credit scores are more likely to obtain lower interest rates and better terms on loans, including mortgages, and credit cards (higher credit scores can also result in lower insurance rates). Landlords and potential employers may also view your credit report and/or credit score. Finally, in order to qualify for certain types of attractive credit cards, such as platinum and titanium cards offering a 9.9% APR for purchases (or lower), you usually must have a credit score of approximately 700 or above (this is a general rule of thumb). Note! We are pleased to offer consumers three free online credit score offers (see above).

How do I correct inaccuracies on my credit report(s) and improve my credit score?

Your credit report will contain instructions about how to correct any errors that may appear on your report. There is no charge to dispute items on your credit report. Disputing items on your report can be a confusing and tedious process, though. Our message board/forum and our step-by-step guide entitled How to Dispute and Correct Errors on Your Credit Report can help you with this process.

What is a Credit Score and How Can I Improve My Credit Score?, How to Correct Mixed or Split Credit Reports and Protecting Your Credit Report Following ID Theft to be helpful. Our board contains helpful information from fellow consumers about credit reports and credit scores. Be sure to utilize our board's handy search feature. You can post an inquiry on our board anonymously. Our board currently has over 33,000+ posts.