If you spend any time on the Internet, you have surely seen the many ads offering free credit scores. It sounds like a good deal, except credit scores are never really free. You will pay one way or the other. To get your rating from one of these companies, you will have to sign up for one of their services, usually a credit monitoring service. That is not necessarily a bad idea. It can help protect you from identity theft, and alert you to credit checks by businesses that want to offer you a pre-approved credit card or loan. But, it’s never really free.
If you do not want to join those programs, you can pay for your score on the FICO website. The only time you can get free credit scores, and the reason why you do not want them, is when a lender denies you credit. A new law going into effect in mid-2011 requires lenders to send the applicant their credit score when they deny their credit due to a low rating. This is a good thing for consumers put in that unfortunate position, as it will eliminate all of the mystery surrounding a consumer’s credit rating.
Don’t confuse free credit scores with free credit reports. You can get a free report once per year from all three reporting agencies. You can also get a free credit report anytime someone denies you credit. Just contact the reporting agency, and they will mail you one. The report doesn’t show you your credit score, but it does give you a lot of good information about your credit history.
Your best bet is to maintain the finest credit history you can. If you have a great rating, you will be approved for most loans. If that happens, you won’t get free credit scores. That is a good thing. If you must know your rating, you can go ahead and pay to get it.
Knowing how to avoid credit repair scams can save you a lot of time and money. There are some legitimate companies that can be helpful, such as credit counseling services, but if you end up with a fraudulent company, you’re bound to be out quite a lot of cash. In reality, a sure-fire way to avoid these scams is to repair your own credit.
These scams involve promises of cleaning negative credit information from your credit report. There is no legal way to do that, so don’t believe the hype. Other things to look out for are companies which charge fees before they provide a service, and companies which recommend you start a new identity to get a fresh credit report. These companies may also tell you to dispute all items on your report in hopes the loan provider will not respond to the dispute, resulting in the removal of the item. They may advise you to avoid direct contact with the reporting agencies so you do not learn the truth about their scam.
You can repair your own credit, and you do not have to waste money paying someone else who only offers promises. For starters, you can request a free credit report from each of the credit reporting agencies. You are entitled to one free report per year, and a free one anytime you are refused credit; so do not pay a company to give you your report. Check the report for accuracy. If you find erroneous items, send a letter to the reporting agency stating which item you’re disputing, and why. Be honest and do not dispute just hoping to get things removed.
After that, you need to start building good credit. It will cost you extra in interest fees, but you can provide your own credit repair by paying on a new loan or credit card. Get a secured card and keep up with it according to the agreement. While you are building your credit with it, other items will eventually fall off your report. Most unpaid items disappear after seven years.
It normally costs money to see your credit score, but here’s how you can get it for free.
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