There are several sites that I visit when I need to check my credit score. There are also numerous reasons for people to check credit scores and obtain credit reports. The credit score, known as FICO, is a major factor that determines the amount and cost of credit that is made available to an individual. FICO is the number that is formulated from credit history that helps lenders evaluate a person’s credit risk. In general, the lower the FICO the higher the credit risk and the higher the interest rate charged for credit. A 100 point difference in the FICO can cost an extra $40,000 in interest on a 30 year $300,000 dollar mortgage.
The credit report identifies negative items that have been reported to the credit bureaus. By having a copy of the report any items that are inaccurate can be identified and challenged. The credit bureaus must investigate and verify the legitimacy of the items challenged within 30 days unless they have reason to believe the challenge is frivolous. If they are unable to verify the legitimacy of any item on the report that is investigated that item should be removed. It may take many letters and other communication with the credit bureaus before items are investigated and removed.
Identity theft is a huge problem for many people today. Thieves obtain a person’s social security number and open credit cards, loans and other forms of credit in the person’s name. Before the individual whose identity is stolen realizes what has happened the thieves may have used thousands of dollars of credit in that person’s name. Since no payments are made on this stolen credit the person begins receiving letters and phone calls from creditors and eventually collection agencies. Negative items begin showing up on the credit report and the FICO score goes down as a result. A person whose identity has been stolen will need to prove they did not open or use the credit in question. This can be a very difficult and time-consuming process and cleaning up the credit report can take months and even years.
Identity theft is a good reason for checking credit score and obtaining free credit report periodically. If your score suddenly starts going down and strange items begin to appear on your credit report your identity may have been stolen. Begin to investigate and challenge any unusual items on the credit report immediately. Cancel all credit cards, loans, lines of credit and any other sources of credit reported on the credit report. It is important to stop the thieves from using further credit in your name and maybe if they try to use a credit card that has been canceled they will be apprehended. An alert sales clerk could call in store security, or get the license plate number that could be use by police to identify the thieves. Bottom line use check my credit score web-sites to obtain free credit report and credit score for monitoring purposes on a periodic basis, e.g., quarterly.