Learn how to make your credit work for you
What is a credit score and how does it affect me?
Credit scores summarize all of the information found within our credit reports. Your credit score is one of the most important numbers in your financial life, and it’s important to treat it as such by paying close attention to it.
Your credit score is calculated using an equation that evaluates multiple data points called “score factors”. Score factors come from all three major credit reporting agencies. To finalize your score, they’ll compare that information and factor in other credit patterns from other credit reports. They’ll then use this information to determine a credit score that will identify your level of credit risk. This will help lenders make assumptions about your financial reliability (i.e. how likely you’ll be to repay your loans or make your credit payments on time). The higher your credit score, the more likely you’ll be in getting the credit for which you are applying.
How are credit scores determined?
By now you know that your credit score is a summary of your credit report information, and that this information is then consolidated into a single number. Every part of a score factors can have an impact on your final score. Below we’ve listed a few factors that are regularly used for this specific purpose.
- Multiple credit inquiries
- Multiple credit delinquencies
- New lines of credit
- High average balance of revolving credit
- Not enough mortgage accounts
How will companies use my credit score?
Companies use your credit score in a variety of ways, which is why your score is so important. It is most commonly used by finance companies, insurance companies, creditors, and even employers. U.S. companies routinely look at credit scores to determine your creditworthiness, which means they’ll use your credit score to help them make quick credit decisions. Creditors can request your full credit report if they feel they need more information about you.
The three credit reporting agencies (Equifax, TransUnion, and Experian) also offer industry-specific credit scores. These specialized reports help lenders get a more definitive view of your financial habits. As an example, lenders in the automobile industry will want to look at a credit score model that evaluates your history of on-time car payments.
Industry-specific scores are always based on data available in the records of specific agencies, so the data will differ from one agency to another. This is important to keep in mind, since not all credit score ratings are necessarily alike, depending on the score model that is requested (auto, mortgage, renters, etc).
What’s the best way for me to view my own credit report?
It’s a great idea to get into the habit of checking your credit report regularly. One way to do it is by visiting www.annualcreditreport.com. Just log in to check out your credit report from all three credit bureaus. By federal law, you’re entitled to view your credit report for free once a year. But it’s important to remember that checking your credit report is not the same thing as credit monitoring. If you’re looking for the security of 24/7 credit monitoring, sign up for CreditCosmo1.com. We’ll let you view your credit report whenever you please, and we’ll monitor your credit across all three credit bureaus. That way, if suspicious or irregular activity ever arises, you’ll be the first to know.
How are credit reports updated?
Credit reports are updated on a monthly basis, but the day of the month on which a credit report gets updated will vary between creditors. Because of this irregular schedule, some agencies will receive updates from a creditor on the eighteenth of the month and from another creditor on the second. That’s why it’s a good idea to check your credit report on a regular basis.
How would you explain credit monitoring?
Credit monitoring is pretty easy to define. In a nutshell, it’s a service that continuously monitors your credit for any unanticipated updates or changes. These updated and changes can include new credit inquiries, records of missed payments, or even brand new accounts (that you may not even be aware of). Our members are immediately contacted if any of the items mentioned above ever appear on their credit. That’s why credit monitoring is an important part of identity theft protection. Credit monitoring services (like ours) will update you immediately if anyone tries to open an account using your personal information. People without credit monitoring, on the other hand, could be putting themselves at risk of someone stealing their identity and running up debt in their name.
What is your definition of a credit inquiry?
Credit inquiries are when financial companies submit requests to receive more information about an individual that will help them get a better look at their creditworthiness. Financial companies use specific elements of your credit report to help them make decisions concerning how much credit they feel they can safely issue you. Some of the most common inquiries take place when someone applies for an auto loan, a home loan, or a new apartment. But it’s important to remember that these inquiries cannot take place without your permission.
What kinds of benefits can I get with a CreditCosmo1.com membership?
Our members get unlimited access to their credit reports and credit scores. They can also take advantage of credit report consultations, 24/7 credit monitoring, and automatic email alerts. They even get full access to our Credit Education Library to help them better understand their credit scores and reports.
When will I be able to view my credit reports and scores?
Right after you sign up! Once you’ve enrolled, you’ll be automatically taken to the member dashboard. The dashboard lets you navigate between your member benefits by using the tabs at the top of the page.
How do I check my credit alerts?
First, log into the dashboard. Then click the “Alerts” tab at the top of the page. These tabs will display the details of any alerts you have received. We recommend that you check these alerts regularly.
What should I do when I receive a credit alert?
The next steps will depend entirely on the type of credit alert you’ve received. For example, if you’ve receive an alert about a new inquiry on your credit report, then you’ll need to make sure you haven’t taken out any new credit lately. But if you haven’t any opened any new accounts or applied for any loans, then it’s safe to say the inquiry wasn’t done by you, and you’ll need to contact the company listed on the credit inquiry immediately. Staying on top of your alerts is vital to the health of your credit report.