Ask the Expert: Why do I need a free credit score?
Free credit score offers, like free credit report offers, can be quite useful. When it comes to your credit report, you have a legal right to a free annual credit report from each of the major credit reporting bureaus — Equifax, Experian, and TransUnion — under an amendment to the 2003 Fair Credit Reporting Act (FCRA). You don't have the same right to a free credit score. However, a free credit score, available from many credit management and identity theft protections services, like those at Credit Diagnosis, can be just as important.
Credit Report vs. Credit Score
- A credit report provides a snapshot of your credit history at any given time — accounts in your name that are open or recently closed, outstanding payment on your debts, and more. Depending upon how active you've been in the credit field, your credit report can run for dozens of pages or longer, covering not just credit card and loan accounts but also credit inquiries, payment histories and more.
- A credit score turns that snapshot into an assessment of your credit worthiness in the eyes of banks, credit issuers and other companies. Instead of offering you reams of information, a credit score reduces your credit history to a three-digit number, somewhere between 350 and 850. The better your credit history has been, the higher your credit score number will be.
Simply put, a free credit report will show you what you've done, credit-wise, over the past decade or so. A free credit score can tell you where you rank on the scale of credit worthiness and how your ranking might affect your future finances.
A free credit score can be a valuable offer. Especially if you're looking into applying for a loan, a mortgage, a credit card, or even a job, requesting a free credit score beforehand can give you an idea of where your application might stand with a loan officer, including how big a loan you might be eligible to receive and at what interest rate. If it turns out that your free credit score falls below the current ideal score of 650 or higher, you can try to improve your credit standing before you apply for a loan or other form of credit.
Therefore, should you come across a free credit score offer, you might want to look into it. Just be sure to research the offer to confirm that you're not locked into paying for services you don't want in exchange for that free credit score.