How's your credit? Quick access to your credit report and FICO score.
Written: Oct 22 '03 (Updated Jan 04 '05)
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Pros: Convenient, reasonably prices access to your credit report and FICO score.
Cons: New federal law requires bureaus to provide free annual credit reports.
The Bottom Line: If you're seeking credit, get your credit report and FICO score beforehand at this quick easy to use site; and use its educational information to improve your score.
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| jsquarejj's Full Review: myFICO.com |
[For some very important information, please read the section below titled Truly Free Credit Reports.]
Your FICO Score
Your "FICO score" is a numeric representation of your "financial responsibility" based on your credit history. Potential lenders may use your FICO score to decide whether or not to grant you credit and what interest rate to charge. Thus, it's extremely important to know your FICO score before you apply for any loan or credit card.
Your score is a number in the range 300-850, with 300 representing "poor credit risk" and 850 representing "excellent credit risk." Actually, you have three FICO scores, since each of the three national credit bureaus (Equifax, Experian and TransUnion) performs its own computation with the data it has and with its own scoring system. Lenders often look at all three scores and combine them with their own assessments of credit worthiness.
Approximately 40% of Americans have FICO scores of 750 or higher, and approximately 1% have scores lower than 500
An Example
Your FICO score will have a profound effect on the interest rate you receive on an automobile loan. A commenter to this article reported the following:
The interest rate on a 4-year used car loan at a local car dealer was a rock bottom 5.697% for buyers with FICO scores in the range 720-850, but it increased to a whopping 24% for those with scores in the range 500-589 (see comment for more details). I assume those with scores under 500 did not qualify for a loan.
What MyFICO.com Offers
MyFICO.com offers a straightforward basic service. For $12.95 you get a summary credit report and FICO score from one of the national credit bureaus. Get the report and FICO score from all three for $38.85. I found this service to be quick, efficient and reasonably priced. The report and score are available moments after you submit your personal and payment information. The system asks two security questions using information from your credit report in order to verify your identity before it makes any of the information visible.
MyFICO.com also offers an interesting identity fraud detection service for $89.95 per year. For this amount, you get an Equifax credit report and FICO score every three months, an email "ID-theft alert" service, and $25,000 of ID theft insurance. I can't comment on the quality of this service since I haven't used it.
How to Improve Your FICO Score
In addition to providing your FICO score, MyFICO.com explains in detail how you can improve it. Here's some of the more obvious advice:
- Pay your bills on time.
- If you have missed payments, get up to date and stay up to date.
- Keep your credit card balances low--way below your credit limit.
- Pay off your debt rather than moving it from one account to another.
- Don't open a lot of credit card accounts.
See the web site for more ideas.
Useful Links
To compare another online credit report site, click Experian.
For information on two credit cards that I recommend, click:
- Great card for foreign travel: a card that doesn't charge the extra hidden fees your card probably charges for transactions outside the USA; or
- Cash back and special benefits: REI Visa card.
Truly Free Credit Reports
Beginning December 1, 2004, a new federal law requires each of the three national credit bureaus to provide a free credit report once a year to any consumer who requests it. The law phases in over a year, so some people will not be eligible until September 1, 2005.
Unfortunately, the law does not require the bureaus to provide a free FICO score with the credit report. When I got my first free report, Experian offered to provide my FICO score for only $3.95, a pretty good deal.
To get your free report from any or all of the national credit bureaus, you must go through a special web site: www.annualcreditreport.com . Do not go directly to the bureaus' web sites, and don't be seduced by the site www.freecreditreport.com, which gives a free report but automatically signs you up for its pay-per-report service.
Recommended:
Yes
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jsquarejj
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Member: Jim J
Location: Santa Cruz, California
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