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Free Fico Score

Written by Robert Ferry on October 17, 2020
Free Fico Score

If you've been looking for where to get your FICO score for free, this article will take you through a comprehensive guide on doing it effectively.

The Fair Credit Reporting Act stipulates that every credit data center should give its consumers a free credit report each year. At the same time, the Federal Law entitles consumers to receive a free credit report even if an organization has implemented adverse measures against them.

Such adverse actions include collections from agencies, judgments and other severe actions that might impose several brick walls on getting insurance or employment. Besides, unemployed persons, people looking for a job within two months and consumers who've reported theft and been victims of crime are also entitled to a free credit report each year from the three agencies.

At a glance, getting your free FICO score straight from FICO is an ideal option, although you'll incur some charges. This hurdle makes the best place to start retrieving your FICO score from your credit card issuer.

What is the FICO score?

When creditors weigh your credit eligibility, they use your FICO score to tell how well you use credit and whether you can be a reliable consumer.

Since its inception almost two decades ago, credit companies have widely used FICO scores as a scoring brand to evaluate consumer eligibility. Income and loan obligations also come into play when creditors decide whether you have the means to repay the loan.

"FICO score" and "credit score" are used simultaneously, but the difference is that FICO falls under and is part of your credit score. Each credit reporting agency has its unique method to calculate your FICO score, which means that your scores from each bureau may show a disparity.

Where to get free FICO score

Knowing your FICO score is the preliminary step to knowing whether lenders will be happy to give you credit. Before applying for a loan, insurance policy, a job, or a residential condominium, your FICO score will make you understand whether or not the application will be approved.

At the same time, monitoring your score will help you deal with bad credit and quickly alert you of any problems you might face. Although you can log in to annualcreditreport.com and examine your credit report, this platform doesn't give you your FICO score.

Besides, some platforms can give you your FICO score, but with some additional cost. Therefore, we’ve compiled an informative list of where you can get your FICO score for free.

Suppose you're a client of a credit counselling company. In that case, the great news is that you can check your credit report and score for which your counselor pays. The same applies to you if you're a client of a company offering housing counseling.

Over 160 financial institutions across the US provide free FICO scores to their clients and nonmembers alike. An additional 40 credit unions give their members free credit reports.

Discover

One major perk of Discover is that it offers a free FICO score even if you're not their client. Whether you're a cardholder or non-cardholder, you can check your credit score by visiting their website.

Here, you'll be asked to enter your contact information, including your email address and SSN. Besides allowing you to check your score as often as you wish, Discover pulls its records from Experian and updates the databases every 30 days.

If you're worried about your credit score, Discover won't affect it since it performs a soft inquiry that has zero effect on credit scores.

Bank of America

You can check your FICO score for free monthly if you're a cardholder at Bank of America.

Additionally, you can check their reports against the national average and confirm whether you're on track.

Keep in mind that Bank of America retrieves its records from TransUnion, so you might not know your reports from other credit agencies. Furthermore, the scores are updated as soft inquiries so that they won't affect your credit score.

Citibank

Citibank gives its consumers free credit scores at the end of every month without charging an extra penny. It also performs soft credit inquiries and retrieves its records from Equifax.

Chase

When you open Chase Bank's dashboard, you'll see a score updated every month from Experian updated.

Checking the score involves three primary steps – signing in, verifying your identity, then viewing your FICO score. Like several other financial institutions, Chase Bank updates its reports as soft inquiries so you won't have to worry about pulling down your credit score.  

Wells Fargo

Although you have to be part of their online program as a requirement, Wells Fargo gives its consumers a free FICO score every month.

Wells Fargo retrieves its credit reports from Experian, and receiving an update won't harm your score.

Five critical things about your FICO score

While this provision is meant to help you track your financial health and make sure you're on track, below are five things you need to know about your FICO score as well as where you can retrieve.

  • The transition from a fee required to providing a free score started with Fair Isaac Corp – the starter FICO scoring model created in 2013 to help customers get insights and open access to their scores. It also encouraged financial institutions to give their customers free credit scores.
  • Your FICO score is one in several credit elements in your score. While it is not the exclusive metric, it's an essential one. Before approving your loan application, over 90% of lenders use this scoring model to decide their disbursement amounts and rates.
  • Among other detrimental elements, identity theft is ranked the most severe aspect of your FICO score. If someone steals your details to open an account, take out a loan, or make enormous purchases, your credit score will drop significantly. Since your FICO score is used by most financial institutions to determine your creditworthiness, such activity will severely impact you.
  • Financial institutions rank your FICO score based on a score range of 300-850. A score of 800-850 is regarded excellent it reduces linearly to a score of below 300 – considered poor.

How my FICO is calculated

Your FICO score is a summary of items in your credit report. It shows how you've handled money in the past and whether you can be eligible for loans in the future.

When calculating your score, your financial data is divided into five entries. Each category contributes to your total score in different proportions.

Below are the five categories that influence your credit score in different levels of immensity:

  • Timely payment of past credits – 35%
  • Debt volume – 30%
  • The period through your credit history – 15%
  • Different credit mixes – 10%
  • New credit accounts– 10%

FICO vs. VantageScore

While the FICO score was incepted in 2013, VantageScore was brought into the landscape in 2006 by the three central credit reporting authorities. VantageScore is gaining the same momentum and traction with consumers and lenders at the same pace as FICO.

FICO argues that over 90% of lenders use their scoring model to make lending decisions and are legally supported in making crucial mortgages decisions. It's currently one of the critical tools used and approved by agencies like Fannie Mae and Freddie Mac – all sponsored by the Federal Government.

A recent study revealed that 2,500 lenders used over 12 billion VantageScore data from July 2018 through June 2019. While both scores can be used together, the newest yet commonly used version of the VantageScore uses a range of 300 to 850, as well as a couple of factors, do attach significance to your credit score.

For comparison purposes, the tables below show the Vantage and FICO models' different scoring levels in determining your credit score.

MetricFICO score 3.0
Credit mix10.0%
New credit10.0%
Credit history15.0%
Payment history35.0%
Credit utilization30.0%
MetricVantageScore 8.0
Available credit3.0%
Recent Credit behavior5.0%
Balances11.0%
Credit utilization20.0%
Age of credit21.0%
Payment history40.0%

No doubt, the two credit scoring models have significant disparities. Still, the common thing is that they attach much weight to your bill payment history.

Despite the credit scoring model you use, the way you use your credit and manage your repayment often matters. While the entries carry different weights, you shouldn’t neglect any as they all contribute to your credit score.

What is a credit score, after all?

If you've been wondering whether there's a difference between your credit score and FICO score, this section will guide you through clearing all doubts.

Your credit score is a quick metric with which lenders use to determine your creditworthiness and how well you manage your finances. It works like a snapshot that works by telling lenders your level of risk using three digits.

If your score is meager, you may have a rough time navigating different lending options and explaining to lenders why they should give you favorable interest rates. Having a good credit score, on the other hand, insinuates that your interest rates will be low and you won't have a hard time scouring the credit market.

You might be astonished to hear that there's no single credit scoring model in the market. Instead, there are different models used by various lenders to check your creditworthiness. After all, having a single model would have meant that having a low score would seal your fate.

Thankfully, different models exist and they typically have a scoring model of 300 to 850. As we've discussed, scoring models use standard metrics to measure your loan eligibility – with the most common being how well you pay your bills.

Nonetheless, we'll look through why it's essential to pay your bills on time and how you can build your credit score.

Importance of your credit score

Your credit rating means more than that three-digit number. It determines where you're going to live, the kind of job you'll have and whether you'll have a break in your career.

Where you live

Whether you're buying a house or leasing an apartment, creditors will want to know your score, so they're confident you won't default in your payments.

If the issuer approves your application, your credit score directly impacts your monthly mortgage payment that will influence your monthly income.

While you can get a mortgage or place to live with a low credit score, a low score will be the top reason lenders give you incredibly high-interest rates and make you pay more in the long term.

This is because property managers consider their rental apartments as a loan, and they want to be sure you'll complete the payment.

Auto loans

Most Americans don't have the funds to fund a vehicle purchase and accommodate living expenses at the same time. For this reason, many will apply for an auto loan to finance the costs they can't meet.

In general terms, applicants with a higher credit rating will receive auto loans with the best interest rates and friendly payment terms. On the contrary, consumers with low credit scores will receive sky-high interest rates coupled with strict payment terms.

A low credit score will limit your options and those lenders who'll be willing to work with you will charge incredibly high-interest rates.

Your work

Having all qualifications and papers that prove you're the right fit for a job isn't sufficient – you need to have a good credit score.

In cases where you're required to handle money or jobs that need high levels of trust, your potential employer will scrutinize your credit report.

A downward trend in handling your finances will show the employer a red flag since they'll doubt your ability to control the company's finances.

Managing your business

If you've been thinking of escaping the 9-5 schedule and establishing your business, you need to start thinking of methods to build your score.

A new business usually requires colossal amounts of cash – going up to $20,000 – that most people don't have.

If you want to have some cash boost, you need to work on your credit score to qualify for such a loan.

Living expenses

It might be astonishing to learn that paying your utilities and monthly expenses needs a good credit rating.

An optimal credit score will make it easy for a company to hook you into its water, electrical or cable service. If you have an incredible credit rating, you might fall behind in your bill payments.

You could be denied for electrical, water or mobile phone contracts if your score is low.

Tips for building your credit score.

Having a less-than-stellar credit doesn't mean you should be stuck there for good. If your score is low, there are viable ways to improve it.

Pay your bills on time

Different credit scoring models attach immense weight to your bill payment trends.

Whether your lender is using FICO or VantageScore, your payment history accounts for over 30% of your overall score.

If your payment history is a bit shady, lenders might be concerned about your ability to repay the loans you're offered. For this reason, it's wise to pay your electricity, water, utility and mobile bills on time consistently.

Keep your credit utilization below a favorable threshold

While experts generally advise that your credit utilization should be under 33%, going below this threshold will be an ideal option.

You don't want to be seen pushing to the limits and going beyond the preset threshold for utilizing your credit.

Someone with a favorable credit utilization threshold will look more profitable in a lender's eyes than someone trying so hard to push to the limits.

Credit mix

The credit mix refers to the diversity of your credit.

If you're repaying a personal loan, it's wise to take out an auto loan that will complement your credit mix.

Lenders often prefer someone with a good diversity of credit since they look more trustworthy to other lenders.

Keep old accounts open

Several consumers have a habit of closing old accounts they no longer use.

Unless the accounts incur annual charges, it's wise to keep them open at all times.

Closing an old account will eat out some points in your credit score, so it's wise to keep them open.

Limit your credit application

Each application for new credit leads to a credit inquiry.

While soft inquiries generally have no impact on your credit report, hard inquiries can severely dent it.

When you have multiple inquiries, potential lenders will view you as someone trying to push to the limits the chances of having credit.

Therefore, it's significant to maintain your applications for new credit at an optimum level.

Conclusion

Having free access to your FICO score is the bottom line to helping you build credit.

As a preliminary step in helping you identify areas that may affect your score, it's essential to always keep an eye on it.

On a concluding note, it's significant to find a platform that gives you free access to your FICO score to help you have a clear picture of your financial health.

Article written by Robert Ferry

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