If you’re working on improving your credit, finding out your credit score is an important first step. Fortunately, there are a few options for getting a free credit score.
First of all, you should know the difference between a credit report and credit score. Your credit report is your entire credit history as a consumer, including both active and closed accounts, credit cards, mortgages, auto loans, student loans, and other information. On the other hand, your credit score provides a snapshot of your credit at any particular moment in time.
If you want to buy a home, you need to know your credit score. Tracking your credit score will also help you to better understand the criteria that lenders are looking for if you want to obtain a mortgage preapproval.
Many banks, credit card issuers, and other financial institutions now make it possible for customers to obtain free credit scores. Check with your financial institution to see if you have access to a free credit report.
Per federal regulations, you may obtain a free copy of your credit report every 12 months from the credit reporting bureaus: Equifax, Experian, and TransUnion. You can request your free credit report at AnnualCreditReport.com.
Credit inquiries are separated into two categories: hard and soft. A hard credit inquiry will be performed by a mortgage lender or other financial institution when you submit an application for credit or loan. Hard inquiries impact your credit score, but are only a small portion of the total score.
When you or an employer checks your credit score, this a soft inquiry. A soft credit inquiry does not affect your credit score.
If you’re planning to buy a home, finding out your credit score starts with requesting your credit report. Obtaining your free credit report will provide you with the important information you need to know about your credit score so that you can work on improving your credit score or correcting any errors.