#annual credit score for free
Free Annual Credit Score
Posted on: March 14th, 2008 by admin
Most free credit reports include a credit score on them as well. Credit scores are numerical calculations that are supposed to indicate the risk that you will default on your payments. High credit scores indicate less risk and low scores indicate potential problems. Most credit scores range from lows of 300–400 to highs of 800–900. The biggest credit scoring company, Fair, Isaac and Company, estimates that about 40% of Americans have scores over 750. Anything over 750 is considered to
be a very good score by most lenders.
Free Credit Score
Lenders use credit scores to help them decide whether you are a good credit risk for new credit, whether to increase or decrease an existing line of credit, to determine how easy it will be to collect on an account and even to project the likelihood that you will file for bankruptcy. Credit scores are used in about 80% of all mortgages as well as in car loans, credit cards and insurance policies. And your credit score not only determines whether you get a loan, but also what interest rate will be applied. If you get your Fair, Isaac credit score (see below), you can visit its website (at www.myfico.com), plug in your score and find out the prevailing mortgage interest rate that most lenders charge to people with that credit score.
Even though your score may determine whether you can get a loan, credit bureaus are not required to disclose your score to you (therefore, they won’t appear on a credit report that you order). However, change is on the horizon. A new California law requires that mortgage lenders disclose credit scores to consumers shopping for a mortgage. Other states or the federal government may enact similar laws in the future.
Another big improvement recently came from Free Annual Credit Reports who have voluntarily made credit scores available for a free. To get your Fair, Isaac credit score, visit FreeAnnualCreditReports.org. A few other companies that create credit scores
have followed suit. Trans Union now provides your credit score (at no extra charge) when you order a Trans Union credit report. Experian also offers a credit score product for $12.95.
Although being able to view your credit score is a significant improvement, the jury is still out on how helpful the score will actually be. It is likely that you will get different scores from different companies. And consumer experts are not certain that the score you order from the Internet will be the same one that lenders use to determine whether they will extend credit to you.