Your credit score is a major consideration for determining what you will pay for many goods and services. Not only does it affect how much interest you’ll pay on a mortgage loan, but it also may be used to determine what you’ll pay for the home insurance. Many consumers are caught off-guard when they discover their credit score has dropped significantly and thus impacted the interest rate on a home purchase. It is up to the consumer to be aware and regularly check this oh-so-important barometer of their credit worthiness.
The good news is you can order a free annual credit report from each of the credit reporting companies (Equifax, Transunion and Experian) once every 12 months. Any consumer can request a free annual credit report via one of the following three options:
It may make more sense however to order them separately at different times of the year so that you can monitor your credit throughout the year. Although the free credit report does not offer your FICO score, it does provide the information you’ll need to determine if it is accurate. There are instructions on the site for disputing the record and challenging any of the information presented.
The consumer should also be aware of other reporting companies that may provide information to the credit reporting companies. These are specialty reporting institutions that report your history for things like title loans, payday advances, insurance claims and other historical background information that could affect an interest rate or whether you get a job for which you have applied. If any of the information reported results in a negative result, the company is required to notify you of which reporting company provided the
information and how to contact them for your report, which is typically free.
Finally, every consumer should check their credit reports annually whether they are suspicious of a problem or not. The information provided to the reporting companies is collected by humans, and humans make errors. It is certainly possible to have a FICO score of 825 and also have errors in your file. And by all means, spend a few dollars each year to track your FICO score so you can be proactive with your credit worthiness.