Maybe I’m not typical, in that I haven’t used a credit card in decades. My credit rating was never an issue that came up when I made large purchases. I don’t even know what my credit rating is. When I bought my house, all I had to do was provide proof that I was earning income and a copy of my bank statement.
How are people having issues where their credit rating matters, and how are free credit report providers making money off them? Is the fear and uncertainty market that lucrative? (For non-insurance companies that is)
You can be sure that the banks involved pulled your full credit report - and that did influence the mortgage rates you were offered. If there were errors on your credit report you’d want them fixed before applying for the mortgage to ensure that you were getting the best rate possible.
Credit scores and reports are extremely important these days, especially after the economic meltdown of 2008. Credit is much harder to get and bad marks against you really hurt. I was able to get an irrelevant collections against me dropped by disputing disputing disputing, and my credit score has gone up since then.
A good credit score/report means a lower interest rate and higher borrowing limits. The lower rates means that for a purchase you were going to make anyway, you save money in the long run (on a house or a car, for example). The higher borrowing limit means that you will be able to get something you are happier with.
It cannot be overstated how important building and maintaining good credit is in this day and age. It’s probably the most important thing in a person’s financial life, other than their actual income and savings.
Free credit report providers (apart from the govt. mandated annualcreditreport.com) make their money two ways - trying their hardest to sign you up for a “credit monitoring service”, and charging you for the FICO score, which is the one that banks actually use. The score they give you for free is their own homegrown score, which isn’t used by anyone who actually lends money.
www.annualcreditreport.com doesn’t give you a score, but it does give you your credit report from the big 3 providers. You can then check this for errors and fraud that will negatively affect your score. They’ll also try to sell you a credit monitoring service, and/or your FICO score, but they aren’t quite as obnoxious about it as the other sites.
Some credit cards are beginning to give their customers their actual FICO score for free as well.
That free annual credit report I always get, always says that I can order my FICO score for a price, but never gives instructions for how to do so! WTF? I’d like to get my FICO score once in a while, but from a legitimate source, not from all those other free-report scams. How do I order my credit score from annualcreditreport?
Please name me some cards I could get that give a free FICO score! Used to be, Washingtom Mutual (remember Washington Mutual?) did this. I got one of their cards just so I could get my score. Since then, the card has become Chase, which doesn’t do this.