How To Find Credit History
Knowing Your Credit Scores and What Is On Your Credit Report Is A Must Nowadays
Where To Check Credit Score | Credit Report Agencies

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Posted: May 6, 2015

Knowing your credit scores today is as important as knowing how much money you have in your checking account.

How To Check Credit History

Unfortunately too many people either don't understand the importance of their credit history and credit scores and/or they think that only creditors can get access to their scores.

When in fact everyone can get their credit scores at any time and should monitor them on a fairly frequent basis.

Creditors use credit scores to predict the likelihood that you will repay any new credit that is granted to you.

If you don't know what is in your credit file  before you go to apply for credit for a major purchase like a car or home, then you won't know if a denial of credit is justifiable or not.

There may simply be something in your credit file that has been cleared by you but doesn't reflect as so by the credit rating agencies.

What's Your Credit Score?

What IS a credit score?

There are three main credit reporting agencies (Experian, Transunion, and Equifax) that are used by most creditors to check credit before approving new credit for applicants.

When you acquire credit through purchasing such things as an automobile, a home, furniture, use of credit cards and gas cards then all activity relating to this credit is reported to one or all of the credit bureaus.  This activity will include the original amount of credit extended to you, your payment activity, your current balance due, if your payments are late or if you even make your payments.

The credit reporting agencies then calculate your credit score by using all this information that is reported to them by your previous and current creditors.  Each credit reporting agency has their own scoring algorithm that is used to calculate the score. These scores represent your creditworthiness to any creditor trying to decide if they want to extend additional credit to you.

Two things will cause your score to be different with each reporting agency.  One, all creditors do not report your credit activity to all three of the credit reporting agencies.  Two, each of the agencies has their own calculation algorithm. 
For example, if you purchased a car on credit then that car dealer may only report that line of credit and your payment activity to say Experian and not the other two bureaus.  This will cause the data in your credit file to be different with Experian than is shown in your file with Transunion and Equifax.

Tri-Merge Credit Report

It is possible for you to get a credit report from each of the credit reporting agencies which will show only the data that they have in their files about you.

It is also possible to get what is termed a "Tri-merge credit report" or "3 in 1 credit report". This type credit report will give you the information about you that is in all three of the credit reporting agency's files.  This information is merged together into one report that is easy for you to read.

At the same time you can request all three of your credit scores.  So, on a tri-merge credit report with scores you may see a score of 680, 629 and 704. Many creditors, like mortgage companies and banks, will use the middle of these scores to determine if they want to grant you new credit.  In our example your middle score will be 680.

What's Your Credit Score? 

Rental Credit Checks

If you apply to rent a new apartment or home then more than likely a tenant credit check will be performed.  You will be required to sign a form granting the landlord the right to retrieve a copy of your credit report and get credit scores.

Some landlords will have only signed up with just one of the credit reporting agencies and that is the agency from which they will do the renter credit check.  Your application will likely be approved or denied based on the information in this one credit report and the credit score from that agency.

Car Insurance and Credit Score

Car Insurance companies will base your car insurance rate on your credit rating.  Obviously the lower your score the higher your insurance rate is going to be.  Some might even deny you all together.  It really pays to shop around when looking for car insurance.
Insurance companies feel that you will not be responsible on the road if you are not responsible with your money and credit.  So, you can see why as little as two late payments on any of your credit items can impact your insurance rates.

House Insurance Cost

The same is true for insurance companies that issue home insurance.  The cost of that insurance is determined by examining the credit scores of the applicant.  Your home insurance premiums may be two or three times the premiums you would have to pay if you have a good credit rating.

If you are purchasing a new home the house insurance cost will drastically affect your closing costs.

I recently worked with a lady who had a homeowner who was willing to hold a mortgage on the house she wished to purchase even though she had less than stellar credit scores.  The whole deal almost fell through because her insurance premiums on the house were so high due to her poor credit rating.

Also, don't forget that the payments on your home will be higher because it generally includes an escrow amount for your next year's insurance cost.

Cell Phone Credit Check

Cell phone providers also want to make sure that you are going to pay your bill each month before allowing you to sign up for a plan.  If your credit history is poor then you may not qualify for the best plan rates,  may be required to pay a deposit or could be turned down all together.

Credit Checks For Employment

When you apply for a job then the potential employer can obtain your credit report if you give them permission.  Employers also view bad credit as a signal of irresponsibility.  They may also be concerned that you will spend more time on the job fretting about your financial woes than concentrating on the job that they have hired you to do.

Employers may also consider an employee's credit score when that person is up for a promotion for the same reasons listed above for a new hire.

Judgement On Credit Report

If you have an unpaid bill that you have just kind of ignored then you may find that the creditor has acquired a judgement against you for that debt.  This judgement will be reported to the credit reporting agencies and will show up on your credit report and have a negative impact on your credit scores.

This debt as a judgement will have a higher negative impact on your credit scores than the debt did as a delinquent, unpaid debt.

Now here is the key thing for you to understand.  You may not have received notice (maybe you have moved) that this judgement has been posted to your credit history.  If you do not check your credit report and fico score frequently you will not know that you need to take some action to get this item cleared up.

Child Credit Report

If you have a child that is 13 years old or older you may think they don't have a credit report because they have never applied for or used credit of their own.  And you may be right.  However, young people are ones that scammers, or those engaging in identity theft, target.  They realize that this is a social security number that they can use to obtain credit, use that credit, never pay those bills and it won't be discovered for years in the future.

Baby Identity Theft

Last week there was a news item on the Today Show about Baby Identity Theft. Every parent, as would be expected, thinks that their child doesn't have anything in their credit file.

That is if your child has not been a subject of identity theft. Scammers realize that parents or the child won't be checking their credit history for many, many years after they have used that child's social security number to run up thousands of dollars of bad credit for your child.

On the Today Show special they spoke with a mother of a two year old whose credit report already showed thousands of dollars of debt and even had filed bankruptcy.

Another parent had a child who was delinquent on utility bills. Her child's social security number had been stolen nine years before the child was born.

Crooks make use of software to predict social security numbers.

Getting a lot of this incorrect information corrected on anyone's credit report can take months and even years. In the mean time the true owner of the negative credit history is being negatively impacted in their normal daily lives.

If you are not monitoring your child's credit report on a frequent basis you or your child may not find this out until they truly go to use their own credit for something like a credit card of their own, new car, college loan or even just their own cell phone.

Get Credit Scores

As you can see knowing what is in your credit file with the three credit bureaus, and what your credit scores are, is vital to maintaining a healthy credit rating.


Glossary Term For Today: Algorithm

Each credit bureau has their own mathematical model that they use to calculate a person's credit score. This credit score is used as an indicator of prediction as to the likelihood that the person will repay any future credit/debt extended to them.

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