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Saturday, September 6, 2014

82. Credit Reports, Credit Scores, and Getting them FREE

Did you know? Credit reports are free, but credit scores are not. 

A. Get a Free Credit Report Yearly or One Every Trimester

Many people are unaware that they are legally entitled to a free copy of their credit report from each of the three credit bureaus once per year. Notice you are entitled to your credit report and not your credit score. I recommend getting your free credit reports here:

I do NOT recommend going to sites like as I believe the site to be a scam.  

Since you're allowed to get a free report once per year from each of the 3 bureaus, I recommend that you stagger the reports at 4-month intervals.  So for example, get your Equifax report in January or February, your TransUnion report in May or June, and your Experian report in September or October.  One way to remember this is to create a calendar entry on your smart phone or computer calendar app. Or if you are more old school write it down in your yearly calendar.

This month we pulled my Equifax report credit report. We also pulled my wife’s TransUnion. It took less than ten minutes to do so. All we had to do was fill out some information and answer questions to confirm our identity. 

Please note your credit scores in the different credit bureaus may vary. That is not uncommon. 

B. Possible to get your Credit Score Free? 

Actually, yes there are a few sites where you can get your TransUnion credit report on-demand, as often as you like, by establishing an account at sites like Credit Karma: 

See the "Full Credit Report" menu item under the "My Finances" tab on your Credit Karma account home page.  Note that the "credit score" that is available for free at Credit Karma is a Vantage score, not a FICO score, so don't rely on it.

Other sites like and also offer similar services for a free credit report. 

The two credit cards from whom you can get your free TransUnion FICO score now are Discover Card and Barclay Card.

Sallie Mae and auto dealer Hyundai also now give students and customers free access to their credit scores on their monthly statements for student and car loans. 

C. Get Your Actual FICO Score. But it's not Free. 

Note that you if want your actual credit score different from a report, then you have to pay for it. The defacto credit score in the U.S. that 90% of companies use is a FICO score, which you can obtain here:

This is not free. You have to pay for this.  It's normally $20, but they often have 20% and 25% sales, so if you need to pull your actual FICO score, just wait for a sale. I think it’s probably a good investment to get your actual FICO score once a year.

D. How FICO Credit Scores are Caclulated

FICO credit scores range between 300 and 850.
Per the FICO website, the five main factors of your credit score are: 35% payment history, 30% amounts owed, 15% length of credit history, 10% new credit, 10% types of credit.

FICO Credit scores 700 and above are typically considered good. With that kind of FICO credit score you can anticipate getting good interest rates on loans and credit cards. Even often 0% interest offers! Remember that paying your bills on time is really half or more of your credit rating.

Don’t get credit cards on a whim because a new credit card account will result in a “hard pull” and your score will temporarily be lowered. Do get a credit card if you don’t have one and use it to make everyday purchases you would normally make anyway such as groceries, gas, etc. Pay the full balance of the card off every month. If you can't pay off the card balance at the end of the month wait to make your purchase. 

Do you get your free credit report at least once a year? Do you keep track of your credit score? Leave a comment!