You probably already know you have a credit score. But do you know where your credit score comes from or how you can learn more about your score?
Many companies claim to offer your credit score to you for free, but unfortunately, sometimes that’s misleading. A company may offer you a free initial score, but then you might have to enroll in a paid program or cancel a membership before a certain period of time to avoid a charge. MoneyLion will provide your credit score for free — no ifs, ands or buts.
Why Check Your Credit Report?
Let’s talk about the difference between your credit report and your credit score — we know it can be easy to confuse the two.
A credit report is an overall summary of your borrowing history. Your credit report shows the credit accounts you’ve opened in the past (such as car loans, mortgages, credit cards, etc.) and whether you’ve made your payments on time.
Your credit score is formulated from the information on your credit report. You might have already heard of the three major credit bureaus: Equifax, TransUnion and Experian. These three credit bureaus collect specific financial information about you from creditors, and from there, calculate your credit score.
Creditors can include your mortgage or student loan lender, credit card company and even your utility company. All of these companies (and others) give information to the bureaus about how effectively you make (or don’t make!) your payments.
Reporting bureaus distill your data into a simple 3-digit score, which ranges from 300 – 850, and pares it down even more from there, so your credit can range from bad to excellent:
Excellent: 750 – 850
Good: 700 – 749
Fair: 650 – 699
Poor: 550 – 649
Bad: 300 – 549
MoneyLion’s app offers free credit monitoring to members. You can monitor your credit score, payment history, age of credit, credit utilization rate, credit inquiries, loans, debt and more. It also charts out your history of credit score changes as well and gives you a “credit simulator” feature so you can test out how actions (such as opening a new credit card, paying off debt or taking a new loan) might affect affect your credit score. You can also purchase a full credit report from TransUnion and Equifax through MoneyLion.
Did you know that one in every five Americans has a mistake on his or her credit report? It’s true! Your credit report may mistakenly list a closed credit line as open or might include credit mistakes from someone else who shares your name. A single credit mistake can damage your score. Checking your report every 12 months can help clear up errors.
Catching Identity Theft Fast
In addition to your financial history, your credit report also lists your personal information. If you pull your credit report and you see names, addresses or aliases you don’t recognize, you might be a victim of identity theft.
The longer you allow identity theft to stick around on your report, the harder it is to remove. Regularly checking up on your credit report allows you to spot (and remove) identity thieves from your account before they can do serious damage to your credit score.
A Free Credit Checkup
Who doesn’t love getting things for free? Under the Fair Credit Reporting Act, you’re entitled to one free pull of your credit report from each of the three major credit reporting bureaus once every 12 months. You can get your free credit report online at annualcreditreport.com, the only authorized website for free credit reports, or call 1-877-322-8228.
A Better Financial Future
If you want to improve your credit score, you need to diagnose what’s dragging it down. Your credit report shows you exactly where you need to adjust, and from there, you can create a plan to help you improve your credit score.
What Your Credit Score Tells You
Your credit score tells lenders a lot about how you manage your money over time. It takes into account your payment history, how much credit you use, account age and how often you open accounts.
Your Payment History
Your payment history plays a major role in your credit score calculation. If you make your credit card and loan payments on time every month, your score might be on the high side. On the other hand, if you often miss payments or if you frequently make late payments, your score may be lower.
How Much Credit You Use
How often do you put purchases on your credit card? How often you use your card is also called credit utilization. For example, if you have a $10,000 limit on your credit card, do you get close to that limit every month? Your score will be higher if you only use a bit of credit each month. On the other hand, your score will likely drop if you get into a habit of constantly maxing out your credit cards.
The Age of Your Accounts
Older lines of credit are more secure because you’re less likely to suddenly close them. Newer lines of credit might lower your score. The longer you leave your credit cards and credit lines open, the higher your score will be.
How Often You Open New Accounts
Opening new lines of credit can be a red flag for a lender if you ever want to take out a loan. Limit the number of credit cards and loans you apply for, as these usually require a “hard check” that can lower your credit score. Avoid applying for new lines of credit while you’re waiting on an important credit decision, like a mortgage approval.
What to Look for in a Free Credit Score Service
Feel like you have a good grasp on credit scores? Now, let’s go over a few key services and features you’ll want to know about before you sign up for a free credit check.
Truly Free Credit Checks
Some companies claim that they let you see your credit score for free — then bait you into signing up for an expensive service. Before you sign up to view your score, read the fine print and know what you’re really signing up for. MoneyLion offers free credit monitoring to see your score, important stats and weekly score updates if you’re using a credit builder loan as well as valuable and free credit improvement advice.
Soft Inquiries on Your Credit Score
Too many hard inquiries on your credit report can lower your score. Look for credit score providers that offer soft checks on your credit report — these allow you to see your score without damaging your credit.
Your credit score can change every month — especially if you’re taking steps to repair it. Look for a provider that makes it easy to check your score multiple times online or through an app.
Credit Score Advice
You can’t improve your credit score if you don’t know what’s causing it to go down. Great free credit score providers don’t just show you your score, they also tell you which factors are raising (or lowering) your score as well. A credit score provider like MoneyLion offers information on which factors affect your score and gives you tips on what steps you can take to improve.
“What if” Scenario Simulators
Life is full of “what ifs,” and when it comes to your credit score, don’t catch yourself off-guard. Look for a credit score provider that offers you tools to show you how your score would change if you paid off accounts or moved money around.
For example, MoneyLion can show you how many points your score could drop if you miss a loan payment or how high it could go if you paid off a certain credit card. This allows you to create your credit recovery plan with fewer guesses on your part.
Access to Your Full Credit Report
Your credit score comes from the information on your credit report. If your score seems unusually low, you’ll want to check out your credit report from at least two major providers. The best credit score providers offer you an easy way to check out your full credit report as well as your credit score.
Assistance with Error Reporting
Let’s say you open your credit report and find that you’re the victim of an error or identity theft. Do you know how to report errors and correct them? Look for a credit score provider that also offers expert help when you need to fix any errors on your credit report.
What You’ll Need to Check Your Credit Score
You’ll need to give your service provider a few key pieces of personal information to get your credit score or credit report.
Basic Identifying Information
Your credit score provider will need to make sure that you are who you say you are before they’ll give you your score or report. You’ll need to list your full legal name, address and date of birth. If you’ve changed your name or lived at a different address in the past five years, you may need to provide that information as well.
Your Social Security Number
Credit reporting bureaus organize consumers using their Social Security numbers. You’ll need to provide your full Social Security number before you can see your credit report. Protect yourself by only transmitting this information over secure Wi-Fi and by only trusting well-known score providers like MoneyLion.
Before you view your credit report, you may have to confirm your identity by sharing past credit information. For example, you might have to choose your current car loan provider from a multiple-choice list or fill in the name of your mortgage provider. This information usually isn’t necessary if you just want your credit score and not your report.
If you sign up for a credit monitoring service, you’ll usually only need to provide this information once. After that, monitoring services that have your permission to check your score can do so when you log into your account.
How to Check Your Credit Report for Free with MoneyLion
You can view your credit score for free when you sign up with MoneyLion. Use these simple steps to get started.
1. Download the App.
Head over to the Google Play or Apple App store and search for the MoneyLion app. Enter your phone number, input the verification code you receive and follow the in-app steps to open a free account with MoneyLion.
2. Open a Zero-Fee Checking Account with MoneyLion.
Once you open your MoneyLion checking account, go to the MoneyLion home screen. On the bottom right-hand corner of your screen, you’ll see a tab labeled “credit.” Click on this tab to see your credit score.
3. Check out MoneyLion’s Credit History Features.
You can view your current credit score on this page — and that’s not all. Once you check your score, explore MoneyLion’s other credit features to learn more about your score and how you can improve it. View your past scores, use the simulator tool to see how you can change your score, or request your full credit report.
Take Care of Your Credit Score
From renting an apartment to opening a new credit card, your credit score plays a major role in your life. Knowing your credit score and reading your credit report is one of the best first steps you can take toward a healthier financial future. Regularly monitor your score and create a plan of attack to work toward a better score — and more opportunities over time.
Don’t know your credit score or want help monitoring your score? There’s no better time to learn all about your credit score than right now. Open an account with MoneyLion today.