How Can You Check Your Credit Scores for Free (FICO and Vantage)
Unless this is the first guide you’ve ever read on debt and credit, there’s a good chance you understand the importance of running free credit checks. It’s a piece of advice you’ll see in every guide to debt, credit, and financial management and it’s usually proceeded by information on credit reports, credit scores, and identity theft.
But what many of these guides fail to tell you is just why it’s important to check your credit score, how you can do it, and why you need to be extremely careful. So, let’s get back to basics and see how you can check your credit report, understand your credit rating, and avoid the scams that plague this industry.
Benefits of Performing a Free Credit Check
Checking your credit score for the first time can be a pretty daunting experience. You know how important this score is so it’s normal to feel your heartbeat quicken a little when you check it for the first time.
But it’s important not to bury your head in the sand as every negative mark can be undone, either via a little proactivity or lots of patience. Ignoring these issues will only make them worse and do untold damage to your credit history.
Checking your score will allow you to:
Spot Identity Theft
According to official statistics, identity theft has affected over 60 million Americans and impacts millions more every single year. If your details have been stolen without your knowledge, multiple credit inquiries and loans may be listed on your report, doing substantial damage to your score.
If you don’t recognize a loan, credit card, or any credit inquiries, then dispute them with the credit bureaus.
Gauge Your Financial Health
Credit card companies, loan companies, and mortgage providers use credit reports to determine the creditworthiness of all applicants. Checking your score allows you to see it as they do, giving you the same valuable insight.
Understanding your score allows you to improve it in areas where you might be struggling. Not only will this increase your chances of getting a loan, mortgage or credit card, but it’ll also improve your offers.
If you have a great score, low-interest rates will be standard and credit card offers will be abundant; if you have a bad score, you’ll struggle to find anything but the highest of rates.
Deal with It
If you’ve been avoiding all mention of credit reports and scores for a long time, you might be expecting the worst. You may feel anxious and stressed and this might stop you from making progress with a mortgage or other major decision. But if you actually check your credit score you may discover that it’s not as bad as you excepted.
This is true for the majority of Americans, as the average credit score falls securely within the “Good” range and there are a greater number of scores in the “Exceptional” range than there are in the “Poor” one. And even if your concerns are realized, it’s not the end of the world—credit reports can be fixed, scores can be improved, and all that stress will go away eventually.
Does Performing a Free Credit Check Hurt Your Credit?
When you check your credit report it registers as a soft inquiry. As discussed in our guide to Soft and Hard Inquiries, this does not hurt your score in any way. Soft credit inquiries are initiated by companies seeking to offer you preapproved cards (often in the form of junk mail) and loan/credit card companies running initial checks, but they are also initiated by the user every time they check their report.
What Credit Checks Hurt Your Score?
The credit checks that hurt your score are known as Hard Inquiries. These provide pretty much the same information as Soft Inquiries, but the mark they leave runs much deeper and serves as a warning to all other lenders, letting them know that a particular user has applied elsewhere.
A hard inquiry will deduct an average of just 5 points from your score, but it can deduct anywhere from 0 to 5 if the FICO model is used, with the actual impact determined by how strong your score is and how extensive your payment history is.
All hard inquiries must go through the user and they typically result from loan and credit applications. A lender or employer can’t leave such a mark on your account unless you explicitly allow it, but the same isn’t true for a soft inquiry.
Safely Obtaining a Free Copy of your Credit Report Online
As you’ve no doubt already seen, there are numerous sites offering credit reports and additional services. Some charge, some don’t, but most of them have some kind of ulterior motive and are not there to make your life easier.
These services can be helpful if you’re going to get pedantic about it, checking regularly, keeping an eye out for fraud, and making sure nothing untoward finds its way onto your report. However, if you’re on a budget it’s an expense you can avoid. Instead, focus on securing a free copy and running annual credit checks to make sure you’re heading in the right direction.
A credit report and a credit score are two different things and the score can also be provided by several different systems, including the latest iterations of FICO and VantageScore, but generally, credit scores are lumped together with credit reports and you can study them together.
Your free credit report is available from the following places:
- Annual Credit Report: The AnnualCreditReport.com site was created by the government in conjunction with the leading credit bureaus. It allows you to request and study your credit report for free, with absolutely no obligations.
- Experian: One of the three major credit bureaus, Experian allows you to access your score for free. You can see both your credit report and your credit score and receive credit card and loan offers as well. It uses the FICO 8 model and does not require your social security number.
- Banks and Credit Card Providers: Chase, American Express, Discover, and countless other providers give their members free access to their credit scores. This is often done via the provider’s web portal and in conjunction with the TransUnion and Experian credit bureaus.
- Citi: If you want to pull a free score via Equifax, then your options are a little more limited. In fact, Citi is the only major bank that provides this option and it does so via its many credit and debit cards.
- Credit Sites: You can also get a free report via one of the major financial sites, including some of our competitors. It seems that every site is offering its own service these days and they all promise free access. However, it’s important to double-check their terms and conditions to make sure they are not selling or misusing your information.
Can I Check Even if I’m Not an American?
If you’re a foreign national living, working or studying in the United States, all of this might seem a bit alien. But if you want your time here to be as comfortable as possible and you’re planning to remain for a number of years, a credit report is paramount.
You don’t need a social security number to build credit in the United States as there are credit card providers and loan companies that will overlook this and it’s not mandatory for the major credit bureaus either. They use information such as your name, address, and date of birth to determine your identity.
It may take you more time to build a credit history, but at the very least you should perform annual credit checks and keep a close eye on how your score is progressing.
This is true even if you have established credit reports in other countries. None of these are relevant in the United States and your debt and credit history do not carry over from one country to another.
What About My Business Credit Report?
Businesses have credit reports as well and these are just as important as personal ones, if not more so. If your business has a poor credit history then not only will you struggle to get funding from a credit union or bank, but you may also scare potential investors away. Your business credit score is provided by some of the same credit bureaus that provide your personal credit score, but the process is different, and these bureaus operate specialist systems for businesses.
The problem with the business side of things is that it tends to be more expensive, as is so often the case, and freebies are hard to come by.
You can currently check your business credit report with the following companies:
Experian is one of the most trusted names in the financial sector, so it will come as no surprise to learn that they are one of the leaders in business credit reports. They offer a one-off service or an annual credit service, with the former costing less than $40 for a full report and score, and the latter requiring an annual payment of under $200 and providing regular access.
This option is a little more expensive as it will cost you just under $100 to pull a complete business credit report, including a Credit Risk and Credit Failure score. If preferred, you can buy your reports in bundles and save less on each one, but this option is still more expensive than Experian.
Dun & Bradstreet
If you have a D&B DUNS number, you can create an account at a cost of $149 a month. This is the CreditBuilder Plus option, but there is also a free alternative, which provides a brief monthly summary.
Free Credit Check Scams to Avoid
As discussed previously when looking at Debt Consolidation Scams and Debt Payoff Strategies, scams are quite common in this industry. You may be overcharged or tricked into giving information that can be used against you. There are a few important things to remember to prevent such scams:
You Have a Right
According to the 2003 Fair and Accurate Credit Transaction Act, all citizens have a right to receive a free annual credit score from the three main bureaus. They are collecting, storing, and distributing information about you, so it’s only right that you get to see it.
Of course, just because the government is giving away free bread doesn’t mean that you’re entitled to the stock of every bakery. In other words, if a third-party provider has their own system or service, they are entitled to charge you for it, and they’ll do just that. This is especially true for providers that offer additional fraud reporting services as well as credit counseling and budgeting tips.
Every time the government creates a scheme that generates immense interest, you can guarantee that a multitude of copycat scam sites will follow. Just like the sites that exploit misspelled URLs or the phishing emails that pretend to be from your bank or online payment provider, the goal of these sites is to mimic, trick, and con.
They are often direct clones that have a similar domain name and they use online advertising and domain name forwarding to draw you in. From there, they’ll try to convince you that they are the real deal to steal your financial information or to begin a financial scam.
Subscription services are some of the most common and most devious online scams out there right now. They were once commonplace with sites that offered so-called “free” supplements, but they have now found their way into the financial sector.
They begin by asking you to sign up for a free service, taking your credit card information either as “proof of ID” or so they can charge you should you decide to remain. Once your account is live, they will take as much money as they want and continue to do so for many months.
When you join you agree to a subscription fee, often unknowingly, and they exploit this as much as they can. However, banks and credit card providers recognize this for what it is and if you contact them and let them know then they should refund you the money.
Some of the worst scams are those that promise to clean-up your report following a substantial payment. These are easier to spot as they prey on weakness and desperation and a little common sense is usually all it takes to avoid them.
Just know that your credit report cannot be fixed by clicking a few buttons, even if they promise to have access to some “amazing government scheme” or to know an “industry secret” that no one else knows about.
At best they will try to sell you established tradelines, something that credit agencies are trying to stamp out; at worst they will simply take your money and steal your identity.
Summary: Free Checks and Peace of Mind
There are two important takeaways from this guide. Firstly, you don’t need to pay to see your credit report and there are multiple services that will give you at least an annual credit check. By all means, pay for a premium service if you want the increased access and the complementary features and services, but know that it’s not essential if you’re on a budget.
Secondly, it’s imperative that you check your report and score at least once a year and preferably once every 3 or 4 months. This can provide you with some much-needed clarity and peace of mind, but it can also help you to spot mistakes and sudden score reductions and allow you to deal with them before they become an issue.