WEEK 1: CREDIT KNOWLEDGE
New to the Live Richer Challenge: Credit Edition? Learn more about it HERE.
Need to catch up? Click on yesterday's task and then come back.
Day 4: Grab Free Credit Scores
Today’s Easy Financial Task: Get your free credit score
How to rock this task:
- Learn what a credit score is
- Learn how to pull your credit score(s) for FREE
“Another day, another dollar.” Or in this case, another day, another credit task.
Today’s task is all about discussing what a credit score is and how to get access to your credit score(s) for free.
What’s a credit score?
Don’t confuse your credit score with your credit report.
The data on each of your credit reports is analyzed to assign you a credit score that reflects your risk.
A high credit score means you’re a lower risk borrower who is likely to repay debt.
A low credit score means you’re a higher risk borrower that may not be able to repay debt.
Since you have three different credit reports from each major credit bureau, you also have three different credit scores. Depending on where you pull your credit score, you may be able to get credit scores that reflect data from one, two, or all three of the bureaus.
There are several credit score grading systems, including consumer education scores offered by Experian, TransUnion, and Equifax. The purpose of consumer education scores are to give us a general sense of where we stand.
These scores are not typically used by the financial industry to make credit decisions.
The FICO Score Model
The top tier credit score model that’s most often used by creditors to judge your creditworthiness is the FICO score model. This is the model we’ll go over in this Challenge since it’s the most widely used version.
FICO scores range from 300 to 850:
- 751 - 850 - Excellent
- 701 - 750 - Good
- 641 - 700 - Fair
- 581 - 641 - Poor
- 300 - 580 - Very Poor
Usually, you have to pay for a FICO score, but you can get access to comparable credit scores like the VantageScore for FREE.
The VantageScore uses a similar system as the FICO score model to arrive at your score and is a valuable way to measure your score growth. We’ll talk about the factors that go into calculating your credit scores tomorrow.
Dream Catcher, you know I have a special place in my heart for you, so I found a place where you can get your VantageScore for free. Yes, FREE!
How to Grab Your Free Credit Score(s)
You can hop on over to SoFi to get your VANTAGE credit score for free.
You can also check with your bank or credit card company to see if free credit scores are offered to customers. For example, American Express, Bank of America, and Chase all offer free FICO scores if you have certain products.
Once you grab your credit score(s), take a moment to review them.
***Sidebar: Do you have a business? Did you know it has it's own credit score? Yup! Get your free business score, plus free tips for building business credit here: Nav.com/Budgetnista
If you’re shocked or worried about your score, don’t fret.
During this Challenge (starting next week), I’m going to give you tips to clean up your credit report and show you how you can increase your score by as much as 100 points in a year.
Leave a comment below or reach out to your accountability partner(s) if you have any questions. Don’t forget to check into the Dream Catchers: LIVE RICHER group as well.
Share what you’ve learned today with your social media friends and tag me @thebudgetnista
P.S. Don’t forget to get your free Live Richer Challenge: Credit Edition Starter Kit. Get it here.P.P.S. Here’s a copy of the Challenge Calendar. It’s a fun way to keep track of your progress.
You can also reach out to me here:
My Lisa Rule: I have 4 sisters and Lisa is the baby (well she’s not a baby anymore). Of all of my sisters, I’m the most protective over her. Before I share any product or service with you, it must pass my Lisa Rule.
What’s the Lisa Rule? If I would not advise Lisa to use a product or service, I won’t advise you to either. YOU are my Lisa's. I feel protective over you and your financial journey.
The products and services I recommend pass my Lisa Rule. Yes, I may be an affiliate or partner and earn a commission off of referrals or income, but I would not recommend a product or service that I didn’t believe was helpful and useful.
Share the wealth!