If you have ever applied for a loan, lease, credit card, cell phone, or apartment, then you already know just how important your FICO score is in your everyday life. Your credit rating is the most commonly used indication of how well you manage your finances, and it is also the deciding factor for the amount of interest you pay on any loans you take out. The higher your score, the better interest rates you can receive, and the more money you can save. So what exactly is this magic number, how is it calculated, and how can you check your FICO credit rating for free?
The Fair Isaac Corporation Score, as it is formally known, is financial history rating ranging between 300 and 850. There are a number of factors which are taken into consideration when calculating your credit score, such as length of credit history, late bill payments, amount of debt, and current credit limits. One important reason why you should frequently check your credit report is to check for errors. It is very common for out-dated, fraudulent, duplicate, and erroneous entries to negatively affect your FICO credit rating.
The Fair Credit Reporting Act and the Accurate Credit Transactions Act both state that it is everyone’s right to request a copy of their FICO credit report once a year. It is hard to know what you can do to help improve your FICO rating unless you request a copy and read over the details. Thankfully this can be quickly and easily done using one of the dozens of free credit report websites online. Many of these companies will also offer additional services, such are credit monitoring and identity theft protection, however these additional services are not required to obtain your FICO credit score.