How to Read Information on Your Credit Report
The three main credit bureaus generate your credit scores based on information on your credit report. Lenders may not report information on your credit reports to all three bureaus, which means your credit reports could be different. Different information translates into different credit scores. That also means that an error appearing on your credit report with one credit bureau may not be present on your credit report with another.
You can access your credit report for free once per year from annualcreditreport.com or through the credit monitoring services mentioned later in this article. It is recommended that consumers check the accuracy of their credit reports at least once per year and their credit scores more often.
Here is what to look for on your credit report:
- Personal Information - Ensure that your name, address, Social Security number, and other personal information are accurate and up-to-date.
- Accounts - Review all accounts listed on your credit report to ensure they belong to you. Look for accounts you don't recognize, which could signify fraud or identity theft.
- Payment History - Review your payment history for each account listed on your credit report. Ensure that all payments are being reported accurately and that no late payments or delinquencies are incorrectly reported.
- Balances - Look at the balances on all your accounts to ensure they are accurate. If you have paid off an account, ensure that it is reported as such.
- Credit Inquiries - Look at the credit inquiries listed on your credit report. Ensure that all inquiries are ones that you have authorized, as unauthorized inquiries could be a sign of fraud or identity theft.
- Public Records - Check for any public records listed on your credit report, such as bankruptcies or judgments. Ensure that all public records are accurate and up-to-date.
If you find an error on your credit report, the next thing to do is file a dispute with the applicable credit bureau(s). Each credit bureau, Experian, Equifax, and TransUnion, has a dispute process for consumers to follow.
How to Check Your Different Credit Scores
There are several ways that you can check your credit score. Many financial institutions and credit card companies now offer free access to your credit score as one of your perks for membership. In most cases, these offerings allow you to check your credit score as often as you want, though you should know that scores and credit reports are only updated every 30 to 45 days, based on when a creditor reports on your recent activity.
Credit monitoring services are also great ways to monitor your credit score and know if something could be wrong. All three bureaus offer these services; Experian, Equifax, and TransUnion, and costs vary based on the program you elect. However, you should know that each source to check your credit could offer a different score. For example, TransUnion and Equifax credit scores are generated using the VantageScore 3.0 model. Experian offers you your FICO score.
Finally, you can also pay to get your FICO score through FICO’s website. Dispute the system you use; what you see might not be the same as what your lenders see, as scores change constantly. That said, your score will be similar enough to be directional and inform the creditor or lender of your creditworthiness.
What Can Help All of Your Credit Scores
Though your score might be calculated differently depending on the scoring system used, there are some tried-and-true tactics to improve all of your credit scores across the board. Those tactics include:
- Paying your bills on time
- Keeping your utilization low
- Keep your oldest accounts open
- Avoiding the desire to open too many accounts in a short period (so only apply for the credit you need)
- Developing a budget to help you live within your means and prevent you from maxing out your credit cards
- Checking your credit report at least once per year (or more) to ensure information is accurate
- Diversifying your credit mix so that you do not have too much of any one type of credit account (a rule of thumb is to keep credit cards to four or fewer)
- Being patient as improving your credit score takes time
Final Word
The FICO and VantageScore systems are the most common credit scoring systems. But to answer how many credit scores are there, consumers should know that multiple credit scoring models are available. These other scoring systems were developed to serve niches in the lending industry. By practicing responsible borrowing habits, keeping your balances under 30%, and using your credit wisely, you can improve your credit score, making you eligible for low-interest rates and better borrowing terms later, such as from a personal loan for good credit.