Assessing Your Credit Score

Assessing Your Credit Score
Establishing & Maintaining a Favorable Credit History
Debt Management & Consolidation
Repairing a Negative Credit Report

Before you can assess your credit score, you need a credit report. The Fair Credit Reporting Act (FCRA), which is enforced by the Federal Trade Commission (FTC), states that the three national reporting agencies must provide to you - upon request - a free credit report every 12 months. This report includes information about you, such as identification and employment information, payment history, inquiries, and public records information. The agencies then sell this information to creditors, employers, and insurance companies.

How to Obtain a Free Credit Report

You can only order your free annual credit report using the one approved website, which was set up by the three national credit reporting agencies: annualcreditreport.com, or by filling out and mailing in the Annual Credit Report Request Form (in .pdf format) at the FTC website.

Note: Only one website is authorized to provide these reports. Make sure that you are at the appropriate website by manually typing the link in your browser. For more information, go to the FTC Credit website: ftc.gov/credit.

After your form is received, it will take about 15 working days to process your request.

I Have My Report. Now What?

The first thing to do is check to be sure all the information on the report is accurate. If not, report it immediately to contact the consumer reporting agency and the person, company, or organization that provided the information to the agency. Go to the FTC Credit website listed above for more information on correcting errors and handling disputes.

Credit Score

Your credit score helps creditors assess your credit risk, and it is derived from a system that operates as follows:

"Information about you and your credit experiences, like your bill-paying history, the number and type of accounts you have, late payments, collection actions, outstanding debt, and the age of your accounts, is collected from your credit applications and your credit report. Using a statistical formula, this information is compared to the credit performance of consumers with similar profiles. A credit scoring system awards points for each factor. A total number of points — a credit score — helps predict how creditworthy you are, that is, how likely it is that you will repay a loan and make the payments on time. Generally, consumers with good credit risks have higher credit scores." - Federal Trade Commission, Building a Better Credit Report

Once you have corrected the errors on your report, if any, and assessed your credit score, you can begin improving your credit score or, if necessary, create a credit history.