Many people have no idea what their credit score is. However, this can be dangerous as it is used in a number of different scenarios. When you find yourself asking, “what is my credit score,” it’s important to know how to get it. More importantly, you’ll know why you should know your score.
The Range of Credit Scores
Your FICO credit score is based on what is reported from the three major credit reporting bureaus. The three-digit credit score tells you a lot about your creditworthiness. If it’s low, you need to know how low it really is. If it’s good, you could probably figure out how to make it better.
The range of scores is between 300 and 850. 300 means that if you apply for literally any line of credit, you may not qualify. This includes applying for an apartment. With a credit score of 850 (or anywhere above 800), you can likely get not only the approval you’re looking for but also a generous line of credit and a low-interest rate.
Knowing where you fall in the range is critical so you can figure out whether you need to make adjustments or not.
How to Check for Your Credit Score
Checking your credit score shouldn’t be a time-consuming project. When you want to know, it should be available to you at the touch of a button. More importantly, you shouldn’t have to pay for it. Your finances depend on your credit score – and paying to find out what the score is a waste of your hard-earned money.
One way to get your credit score is to ask for it once you’ve applied for a line of credit – mortgage, credit card, whatever. They’ve already pulled your credit and made a decision based on what’s in the report. Therefore, you have a right to get the report that was used.
Another way to get your credit score is to sign up on a website. Do you want to know what your credit score is? You can sign in, click a button, and be told what the most up-to-date score is. Then, you can even ask for notifications when there are important updates.
If you have to wait days, weeks, or months to get your credit score, there’s no telling what could happen. What if someone reports that you had a late payment when you didn’t? What if there’s an account on your report that you didn’t open? Your score could be steadily dropping without you being any wiser to it.
The credit reporting bureaus report monthly, and they all report at different times of the month. It’s always changing – and with those changes comes relevant information you should stay on top of.
Why a Credit Score is Important
When you find out the answer to ‘what is my credit score,’ it tells you what you can expect from various creditors. You might be surprised to find that a number of places will depend on your credit score.
Apartment complexes, landlords, and utility companies will often run your credit to determine how high-risk you are. Even if you have a low credit score, they may approve you – but it may result in having to put money down into a deposit.
Credit cards, stores, and more that offer a line of credit will run your credit to see how many accounts you already have open and what your payment history looks like. When you have a higher credit score, it can often lead to a lower interest rate. This is one of the major benefits of having a high credit score – you’re rewarded by not having to pay as much interest.
How to Improve a Credit Score
What is my credit score? Once you know the answer, you can work to improve it in a number of ways. Especially if it is below 700, you may have a significant amount of work to do. The good news is that the credit reporting bureaus report on a monthly basis. Within a few months, you can raise your score quite a bit.
One of the biggest things that credit bureaus look for is how well you’re managing your debt. This is measured by whether you pay all of your bills on time. If you make a late payment, it will be reported. If you’re 30, 60, or 90 days late or you’ve been reported to a collection agency, it can weigh even heavier. This is why many financial advisors will say to pay everything on time if you want to improve your credit score.
There are a few tips that you can do to help improve a score that needs a bit of help:
- Set up payment reminders so you don’t forget to make payments
- Don’t apply for new credit unless it’s really important
- Pay down cards that are close to the credit limit
- Don’t close accounts that are well-established
- Dispute errors as you find them on your credit report
It can be difficult to know if you have errors on your credit report or even if you have a low credit score. This is why you need to ask for a credit report every couple of months. If your rate has gone up, you know you’re doing well. If your rate goes down, you can take the necessary actions to fix it. Knowing the answer to ‘what is my credit score’ is critical – and if you’re not sure, it’s best to find out using a free website.