Posts tagged ‘3 credit reports’

Average Credit Score

Consumers and borrowers from around the country all have different credit scores. When using FICO, this score normally ranges from 300 to 850 and is an indicator of your reliability when paying back loans. Lenders use this number to quickly gauge whether or not they should give you a loan or line of credit. While it’s not an in-depth look at your credit as a credit report, your credit score is still a highly important number. The higher the score, the lower risk you are to a potential lender. This goes beyond just seeing your 3 credit reports or your free credit reports from all 3 bureaus.

When looking at your credit score, please also keep in mind that different lenders use different scoring models. The most common is FICO and this is used by the 3 main credit bureaus – TransUnion, Experian, and Equifax. This number, as mentioned above, ranges from 300 to 850. However, there are other different credit scoring models which use a different number range. Some may go 501 to 990 and others go 360 to 840. When looking at your credit score, it’s also important to know which scoring model was used. Since FICO is the most commonly used, that is what this article will focus on.

In America, the average FICO score in 2014 was around 690. This is much higher than even a few years back when the average scores were in the 685 range. Some say the current trends are showing consumers becoming more financially responsible.

If you are looking for your score online, you are probably wondering if your score is good enough to get a loan to buy a new car, house, or even take out a new line of credit. Your free annual credit score isn’t really free however. But there are free trial offers available for it.

You are probably also curious how your score stacks up against others in your age or income bracket. Let’s take a look a closer look at the numerical value of your score in a quick breakdown:

Below 649 is normally considered a poor, but usually repairable score. You either have a lot of unpaid debt or you have no credit at all. You may have trouble getting a loan. You most likely will not be able to purchase a new car or home with this score. It must first be improved. If your score is low, try a secured credit card to rebuild your credit. Additionally, begin paying back old debts.

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650-700 is considered the “average” range. You most likely have some debt which exceeds your ability to pay off. You still may have trouble getting a loan within this score range, so first try paying off your debt. Most lenders will not issue you a loan or line of credit with this score. You may be able to get a basic credit card.

700-749 is considered a good score. You may have a little debt, but you are paying it off in a timely manner. Most lenders will be happy to work with you as this score range shows you are a reliable person. Most credit card companies will approve you at this level as well.

750-850 is an excellent credit score. With this score, you will be able to get an auto loan, home loan, and use the best credit cards with the best rewards. Opening a line of credit will be easy. Lenders will be more than happy to offer you loans. Once you reach this score range with your credit, maintaining it will be key to the rest of your financial health in the future.

Free Annual Credit Report

When is the last time you looked at your credit report? If you are like most people, you let months and even years pass between checking your 3 credit scores. Some consumers are unaware of how credit works or it simply scares them off. They think it’s too complicated or might be too expensive to request a copy of their credit report. But, this isn’t necessarily the case.

Sure, if you want to check your report every week or every month, you will have to subscribe to a costly credit monitoring service, but if you just want your free annual credit report then you can view it for free online. For most consumers, this free annual credit report is all they need to keep their credit healthy and in good standing.

Why is it free? There is a federal law in place which allows consumers to check their credit reports from the 3 major credit reporting agencies (Equifax, Experian, and TransUnion) once a year without any cost associated with it. This is a called a free annual credit report. As a consumer, you are entitled to see the contents of your credit report so you can make sure there is no errors or fraud. If any errors are spotted, you can work with the credit reporting agencies to fix or eliminate them before they do serious damage your credit. It is highly recommened that you take advantage of these free annual credit reports.

As a responsible consumer, you should always be aware of the contents of your free annual credit report. After all, your credit report is what lenders are looking at when you try to get an auto loan, mortgage, line of credit, or any kind of loan in general. They can see any current loan you have, how often you pay them back, and whether or not you are late on any payments. Paying your loans back on time every month shows lenders that you are a low risk and you will be able to secure a loan. Having a clean and responsible credit report is key to securing any kind of loan or line of credit.

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With identity theft on the rise, it makes checking your free annual credit report even more important. The last you thing you want when trying to build your good credit is someone stealing your personal information and then taking out loans with your name. These ID thieves will also open lines of credit in your name with no intention of ever paying the money back. This can do serious damage to your credit and make it impossible for you to ever buy a car or home, so it is vital that you are checking your credit report at least once a year.

There are many different websites online that will allow you to check your credit reports, but a lot of them will charge you. If you want to request your free annual credit report, you should visit annualcreditreport.com which is a government owned website for consumers to get their report once a year without any kind of cost. It will show you your reports from the 3 major reporting agencies – Equifax, Experian, and TransUnion.

When viewing your free credit report, make sure you are checking everything in detail and keep these tips in mind. Look closely for any fraud or errors and report them immediately. Make sure lenders are reporting your payment habits correctly. If you notice any old debts that are still unpaid, take care of them to improve your credit. Remember, credit is an important part of your financial life. Make sure you are checking your free annual credit report each and every year!