Credit “Snapshots”

Some websites offer summaries or “snapshots” of your credit report. These reports contain high-level information only of which are acceptable for quick reviews of credit and scores. There are three national credit bureaus: Equifax, Experian and TransUnion. Each collect and receive credit information from creditors. Learn more about these institutions in our blog, “Everything You Need to Know About Credit”. The only place to get a free credit report from all three major credit bureaus each year is through www.annualcreditreport.com. The Fair Credit Reporting Act (FCRA), a federal law, requires the credit bureaus to make sure that the information they collect about you is accurate, gives you a free copy of your report once every 12 months and gives you a chance to fix any mistakes. 

It is vital to review your report for suspicious activity or fraudulent accounts as this can be a sign of identity theft. If you do spot an error, you should take the necessary steps to correct it with the lenders and bureau.

Credit Score Difference

There are many websites that offer scores and it is important to note that the credit score you obtain from those sites differ from what your lender obtains. Those sites provide you with your estimated TransUnion and Equifax scores by using a VantageScore scoring system or a “FAKO” score, also known as “educational scores”. While this will affect some accuracy of the information provided, it does not mean that the score is not legitimate. They stand by their word of offering users a free service along with recommendations on consolidating loans, financial resources, and the like.

When using a credit reporting system, it is best to use one that pulls information from a source with “FICO” scoring. FICO scoring is what Lenders typically use to obtain credit scores from Experian, Equifax or TransUnion. Each of these agencies calculates a consumer’s credit score differently depending on what is in the consumer’s credit file with that agency. On top of that, each agency might calculate a consumer’s credit score in a number of different ways depending on the type of loan the consumer is applying for. A consumer could have a different credit score with the same agency depending on whether he or she is applying for a credit card, an auto loan or a mortgage, or even starting a new service such as with the electric company. The only way to know the exact credit score a lender bases its decision on is to apply for the loan, but you shouldn’t apply for a loan or credit card you don’t need just to see your credit score.

The Federal Trade Commission and the Consumer Financial Protection Bureau sites contain extensive information about credit reports, your rights, and the laws that guarantee these rights.

Credit Builder Loan 

Sources:

https://www.annualcreditreport.com/

This blog post is intended to provide educational information and shouldn't be considered legal, tax or financial advice. Consult a tax or financial advisor for specific information on how certain laws apply to individual financial situations.