Same as with your word, your credit score is an essential portrayal of your reliability, integrity, and dependability. Your credit rating is required for far more then deciding whether or not you’re able to repay a loan; it lets businesses know if they can trust you. Another crucial service that credit reporting companies provide is to ensure your credit score isn’t suffering from actions you haven’t approved or, in some cases, transactions you weren’t even aware of.
Identity theft has become a significant crime against regular people, from whom thousands of dollars are stolen every year. That’s why it’s imperative always to know what your credit score is and to make sure you’re aware of any activity on your credit report as soon as it happens. For this reason, credit reporting companies have become a crucial part of everyone’s financial foundation. But which company is the best and most thorough? We are going to answer that question for you and help you choose a company that provides the most current information available about your credit portfolio.
The Differences in the Credit Score Reporting Models
Before we get into which online credit monitoring company is best, you need to understand the differences between the credit scores you receive from free credit scoring services and the credit scores that institutional lenders receive. The free credit scores, typically referred to as “equivalency scores” or “educational scores,” often maintain the misconception they aren’t real, like the ones that lenders receive. The free credit scores you receive from reputable sites are, in fact, real. However, for several reasons, they usually only give you a general idea of your standings with a specific creditor. Lenders will request credit reports, typically tailored to the type of loan application. For example, TransUnion’s Account Management Model is specifically designed to help lending institutions evaluate their existing accounts, identify the most profitable account holders they have and determine which account holders are most expected to become delinquent. Other credit bureaus will offer different models that provide various types of information on the same account.
The Difference Between VantageScore and FICO Scoring Models
There are two credit scoring models available to you through the free credit monitoring sites, the traditional FICO model and the newer VantageScore. Commonly known as FICO, The Fair Isaac Corporation, model has been used by lenders, businesses, and retailers for over 60 years, to obtain the credit scores of consumers. VantageScore is a rating product that was developed by Equifax, TransUnion and Experian credit rating agencies as an alternative to the FICO score. VantageScore uses a rating scale of 501-990 compared to FICO’s 300-850. It also claims to be a score that provides lending institutions and banks with information related to subprime financing. Launched in 2006, VantageScore is calculated through a weighted average of the characteristics of the specific consumer, including:
- Available Credit
- Recent Credit
- Payment History
- Credit Utilization
- Depth of Credit
- Credit Balances
The Free Credit Score Services Broken Down
Credit Sesame provides a free credit score that’s updated monthly and a free credit report profile based on several financial components which are also updated regularly. Even though the service doesn’t offer an actual credit report, you may still find the credit profile helpful. Credit Sesame also provides free credit monitoring which will notify you if something changes in your credit report. They also provide customers with loan recommendations which will help save money based on the analysis of their financial profile. Credit Sesame makes its money if you close on a loan with one of its recommended providers and not by selling members’ information to advertisers.
Providing free credit scores and reports from TransUnion and Equifax, Credit Karma’s VantageScore 3.0 model credit scores are updated weekly free of charge. Additionally, Credit Karma provides free credit monitoring for your TransUnion report. This credit analysis summarizes critical details from your credit report and contains a free credit score simulator that shows you how your various actions, adding a new credit card or increasing your credit line, will likely affect your credit score. Credit Karma doesn’t make its money selling your credit information to advertisers. They make their money if you open an account with one of their advertising partners through their website.
Claimed to be “used by thousands of lenders, including the nation’s largest banks” Quizzle offers their customers a free VantageScore credit score. They also provide a free Equifax credit report every three months. Quizzle Pro, their premium service, provides a monthly credit report and score, 24/7 credit monitoring and more. Quizzle Pro+ includes everything that Quizzle Pro does with the addition of several identity theft services.
When you sign up for free, at Credit.com, you receive an Experian score and your VantageScore 3.0 which are updated monthly. Credit.com also provides a free credit report card that shows how the information in your credit report affects your score, along with tips on how to improve your score. As is the case with the other free credit score sites, Credit.com won’t sell your data to third parties. They make their money when their customers apply for offers through their promotional links.
WalletHub provides you with your TransUnion VantageScore and reports data, that also comes from TransUnion. The dashboard created for you shows all of your credit accounts and your balances. WalletHub’s alert section gives you a letter grade on the factors that influence your credit score. For example, you’ll be alerted if your debt load is too high in comparison to the amount of income you supply. It also notifies you if your credit utilization is also too high and affecting your score.
Which Site to Sign up For
Rather than choosing only one site to sign up with, consider signing up for all five services. This will supply you with a broad view of what your overall credit situation looks like with each of the credit bureaus. Choosing more than one credit reporting service will also better position you to catch identity theft, in its earliest stages, before extensive damage affects your credit score. In the past monitoring, your credit score was neither easy nor free. Today you’re provided with some powerful tools to, not only monitor your credit score but also to maintain it and guard against identity theft. This is why it’s crucial you familiarize yourself with the tools available to you and put them to good use.