Check Your Credit Score For Free With The Agencies

Credit score for free is a mandatory right which has been introduced by Federal Government legislation, giving anyone the right to see what the three major credit reporting agencies have placed on their file once a year without the need to pay for the information. This can be extremely useful if you know that you will be needing to take out a major loan in the future, such as a mortgage on a property If there are negative markings on the file, they cannot be removed but they can be disputed so that your side of the argument is known, and steps can be taken to rebuild the score.

The credit scoring system is controversial. It has many advantages to the creditors in that is cheap and easy to use, but there are problems with it. It is only a partial reflection of how well an individual is able to manage their finances, and it is a system which can be gamed by those who are determined to make their score look artificially high. This is a strategy which is followed by many who know they will need to borrow money in the future, and it can be achieved most effectively by taking out many credit cards and getting raised limits.

The system gives you an inbuilt incentive never to pay for anything with cash or a debit card. If you can always pay by credit card, and then pay off the balance immediately every time, you will be building up a history of borrowing and successfully paying back money. This is reported back to the credit agencies every time it happens, and it will force your score to go higher. If you can meet every repayment bill on time every time, there will be nothing for the lender to report back except positives.

credit rating

The problems only arise when there are missed payments and other difficulties which show up on the file, and these can be assessed by checking your credit score for free. You can do this once a year, from all three of the major credit reporting agencies. Dealing with negative reporting is not easy, although it is possible to file disputes with the agencies for anything which has been reported incorrectly. The more negatives there are, the lower your score will be, and if there are only one or two bad entries then consistent good entries will still lead to a higher score.

It is usually when there is a major change in circumstances that serious problems occur. When someone loses a job or goes out of business, this can often be the start of a chain reaction which can have a devastating effect. This can be made worse by a tendency to bury your head and to start ignoring demands which you know you will never be able to meet. It is vital to do the opposite, and to meet the problem head on to try to find a solution. Not every creditor will be prepared to work with you, but the ones which do can help you create a rebuilding plan.

If you have not used up your yearly allocation, start by checking your credit score for free. This will show you exactly what has been reported and why. You can then start working on a plan to reduce the damage, and possibly to return your credit rating to health over a long period of time. It is the mortgage loan which must be addressed first, as mortgage lenders are the most likely to agree to a renegotiation. This is also the most important loan most people have, and its status can be assessed every year by checking your credit score for free.

 

 

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