Check Credit Score - What to Do and How to Do It

Let's address the immediate questions of What you can do to get your credit score. Then we'll look at specific issues and How to address them.

What To Do to Get Credit Score
Despite some misconceptions, requesting a credit score is not free. If you approach a service or any of the top three credit reporting agencies (CRAs), Equifax, Experian, or TransUnion, you will have to pay a fee for the credit score. Since the scores from each of the CRAs will be different, then you face three fees: one from each.

When you plan to apply for financing or renegotiate your current rates, knowing your credit score from each of the top three CRAs is advised prior to contacting the financial institution. However, if you've already applied then you can request from the institution to release the scores. This can be done regardless whether you've been accepted or not (if never hurts to ask), at it should be at no cost.

Also, you are entitled to receive a free credit report (not score) from each of the CRAs for free once each year. It is more important to keep track of your credit history by requesting a report so that you can correct errors and address credit issues. Understand that the credit score is derived from the credit report. Also, your credit history in each of the CRAs will be different requiring you to approach all three CRAs for their free report.

It is best to request your score or report directly with the CRA, rather than through an intermediary or third party or service, to avoid errors. It is not uncommon for report requests through a service to create issues in getting the report free if the service fails to deliver. Also, when contacting the CRA, request getting the report online to avoid delays and lost reports in-transit.

There are services available that will provide for you your credit scores (as part of the service). They charge a monthly (or annual) fee after a 7 to 30 day trial period. A service to consider would be a credit monitoring service to avoid identity theft.

Credit Issues: How to Address Them
Let's do in a Question and Answer format.

Q: What's the cheapest way to get my credit score?
A: Citi Identity Monitor appears to be the cheapest, at $4.95 monthly

Q: How long should I wait to check my credit score after closing several credit card accounts?
A: If you plan to close down one or more credit cards, it is suggested that you leave your oldest accounts active to maintain your credit score. Closing down the oldest accounts will adversely affect your credit score. Once an account is closed down, it should be reported to the CRAs within 30 days (monthly reporting). Therefore, you might want to wait at least 30 days, and perhaps 60 days to ensure the reduction in credit card accounts is both reported and recorded in your credit history by the CRAs.

Q: Can an employer reject me because of my poor credit score?
A: It is true that employers do check credit scores to analyze a person's creditworthiness. If the Terms of Service in the organization includes checking the creditworthiness of an individual for the purpose of hiring, firing, and demotion, then it is legal (this may vary from state to state). Your only right is to dispute the information on the credit report, which is why it is important to monitor your credit history.

Q: Who calculates my credit score?
A: There are three primary credit reporting agencies or bureaus (CRAs) that apply a derivation of the Fair Isaac Corporation formual (FICO). While most institutions rely on the FICO scores of the three agencies, many banks, mortgage companies, and lending institutions apply their own formula to better represent their specific lending criteria and measure of risk.

Q: What factors in my credit history (report) affect my credit score?
A: There are numerous factors in your credit history that impact your credit score (some of which are trade secrets). Some of the key factors are: payment history; debt to income ratio; credit mix; new credit; length of credit; etc.. If you're just establishing credit, start with a secured credit card (as opposed to an unsecured credit card). You may be charged an annual fee, but it may be the only way to establish credit. With a secured card, your credit limit is equal to the deposit you place in the account. Make sure to repay the balance within the due date each month to establish good credit payment history. After a while, you can apply for an unsecured credit card.

Q: How often can credit scores be checked without affecting the score?
A: For hard credit checks (by banks and lending institutions) used to consider an application for a loan, the CRAs will treat such inquiries as one request within a 30 to 45 day period. For other requests, like auto loans or credit checks for employment, each will have a negative impact.

The author has an MBA in Finance and extensive experience with financial institutions. You can also check out his latest website on Free Credit Check which provides sources for credit reporting and credit scores, or Check Credit Score for understanding your credit report information and what you can do to improve your score.. Article Source: http://EzineArticles.com/?expert=R._Dodger