LOUISVILLE, KY (WAVE) - Tax season is the time of year when a lot of people decide to get their financial situation more organized. One of the first steps is to know your credit score.
By law, we all have access to three free credit reports each year, one from each of the nationwide consumer reporting companies- Equifax, Experian and TransUnion. But that report doesn't tell you the entire story, it's the credit score that's going to save you money.
True, the score is based on what's in your credit report. The report is basically a blueprint of your credit history. The kinds of credit you use like credit cards, loans, mortgages even if you pay bills on time. What it doesn't include is the individuals actual credit score.
Consumer Reports' Amanda Walker says we need to know both. "Well, you certainly want to know both when you're applying for a loan. That's what lenders are going to look at when they decide how much they're going to charge you."
And not just loans. The score is a number usually from 300 to 900. Credit card companies may determine card terms based on the number. If you have a good score, tell your auto insurer.
"Insurers look at it, factor into the rate that insurers would charge you" Walker said.
To be certain the number is as high as it should be, take advantage of getting free credit reports.
"As soon as you know what's in your credit report, you can go correct any errors. If they say for instance, that you've paid bills late that you have not paid late, that can lower your credit score" Walker said.
But be careful, several companies offer free credit scores while signing you up for pricey credit monitoring that you don't need. Instead, experts recommend staggering your 3 free credit reports through the year to monitor your credit yourself.
The advocacy arm of Consumer Reports is pushing for legislation that mandates free access to your credit score. Right now, you will likely have to pay.
To get a free report visit annualcreditreport.com Visit Consumers Union new web page at DefendYourDollars.org to find the petition asking the government to make a free credit score part of your free credit report. And visit consumersunion.org/creditreport for more advice on how to get started. For information on how to fix mistakes access the Federal Trade Commission's full guide.
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