Review Your Credit Profile
Before applying for a job it's a good idea to review and polish up your resume. Applying for credit is no different. Your credit 'resume', or profile, is made up of two things - your credit report and credit score. These should be reviewed before submitting an application to a lender.
Step 1: Get a free credit report
The Fair Credit Reporting Act entitles you to a free credit report every year from each of the three major credit bureaus. You can request your free reports by telephone, mail, or online at annualcreditreport.com. You have the option of getting all three at once, but to stay on top of your credit profile we recommend getting one every 4 months.
AnnualCreditReport.com is the ONLY authorized source to get your free annual credit report under federal law.
Step 2: Get your credit score
After looking over your credit reports you might be surprised to find your credit score was not included. Unfortunately credit scores are not free. Since many lenders use your credit score to determine your creditworthiness it is wise to know what it is.
Here's how to get a free credit score: Some companies will give you a free score for subscribing to a credit monitoring service. You can cancel the service within a few days and pay nothing. Their hope is that you find the service useful (which many actually are) or you forget to cancel and get charged anyway. Be sure to read the fine print to avoid any unforseen charges. Check out the following offers to obtain your credit score:
Get a free Experian credit report and score when you sign up for a FREE 7-day trial to Triple Advantage Credit Monitoring.
Step 3: Analyze your credit report and score
Each lender will analyze your credit profile differently depending on the type of credit you are applying for (home loan, credit card, etc.) But as a general rule of thumb, you can estimate your creditwortiness with your credit score. While there is no strict line between good credit and bad credit, the following chart is a good indication of how a lender might view your credit profile. Where do you stand?
If your credit report is clear of negative items and you have a credit score in the 640 - 800 range your options for getting a credit card are many. Congratulations, you are now ready to research credit cards.
If there are delinquent accounts and late payments on your credit report you will generally have a low credit score. Lenders will view you as a high risk borrower and your options for getting credit will be limited. Some lenders cater to those with past credit problems but can often charge higher rates and fees.
Practicing responsible credit management is the first step towards a better credit profile.
