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In understanding credit it is important to know both what your credit report says as well as your credit score. Discussions of credit reports and scores are often conflated. They are linked to each other but it is important to understand the differences. As always, Bloghers can help you sort it all out.
Your credit report is a record of your credit related activity such as credit cards, loans, mortgages and your payment history. There are three major credit bureaus and for most people your report will differ from bureau to bureau and at least one will likely contain some mistakes.
You can get copies of your credit reports for free every year at www.annualcreditreport.com which is the only truly free site (others require you to sign up for credit monitoring or other products or services). You should read carefully as you go through the process as the credit bureaus might try to get you to make purchases before giving up the free reports.
You can get one report a year from each bureau so one tactic personal finance bloggers often recommend is to pull one report every four months so that you are continuously monitoring throughout the year.
The other way you can get a free report is if you apply for credit and are turned down due to adverse information in your report. Information on who to contact will be in the letter that must be sent to you in explanation.
Bankrate.com (which is, in general, a terrific source of information on credit and banking) has an excellent report on how to read and understand your credit report.
Why should you check out your credit report? There are several reasons such as just generally familiarizing yourself with these important records, to check for indications of identity theft, to look for mistakes so that you can take steps to have the credit bureaus correct them, because as Lifehacker points out, you are job searching or as Protect Your Good Credit discusses, you are shopping for a mortgage, loan or credit card.
What you will not get when you obtain your credit report is a credit score. Credit scores are calculated based on information in your credit reports but different organizations calculate your score using different models. The key one you want, you can't get for free, unfortunately. That score is your FICO score.
FICO stands for Fair Isaac Corporation and their widely-used credit scoring model is proprietary and separate from the credit bureaus (which each calculate their own scores). You can get credit scores from other places but they will not be your FICO score.
Paula G. (from coaching4lesbians.com) is the newest contributor to Queercents and kicks things off with a primer on FICO scores and credit reports.
Emily Davidson and her co-authors at Credit Bloggers has a series of posts to help you understand the differences between the various types of FICO and non-FICO scores, including:
A three-part series asking: "Will the Real Credit Scores Please Stand Up?" Part 1, Part 2, and Part 3
Misconceptions about credit scoring.
And, their newly launched tool for estimating your credit score.
In addition to learning all about how your FICO credit score works, how it relates to your credit reports and how to make your score move up or down, there is a new credit score vying to displace FICO and make you re-learn your credit scoring lessons all over again. That score is the Vantage score and it is a joint effort from the three major credit bureaus to compete with FICO.
Bloghers can help you learn about this new score...
Stacy at Birds and Bills covered the launch of the new Byzantine credit scoring system.
And now that Vantage scores have been around for several months, Emily Davidson and Money Dummy each review the new product.
And, let me leave you with a tip courtesy of Single Ma: "Get Ya Credit Straight." Single Ma used creditboards.com as a resource for learning how to improve her credit. The space has a mix of articles and forums covering every aspect of credit and if you are looking for support in your quest to improve your credit, there is quite a community of like minded souls sharing tips, tricks and successes.
