Thursday 27 Sep 2012

Beginner’s Steps #1. YOUR CREDIT SCORE v.1

My Credit Score from Credit Sesame dot com

This post is way beyond just beginners. This post is for anyone who needs, uses, or has credit, which is everyone. Learn about all sorts of aspects of your credit score, credit report, and other aspects that you may have never heard of!! The only reason it is listed in the Beginner’s Steps category is because EVERYONE, and ESPECIALLY beginners need to know the steps and information outlined below!

This is the first edition of my “Beginners Steps” series, and the first topic that we need to discuss immediately is: YOUR CREDIT SCORE!
The topic of Your Credit Score within the Beginner’s Steps series will also be multi-part because the information is so serious, and so in-depth.

You probably hear the phrases “need credit”, “credit card”, or “bad credit” in tv commercials, radio commercials, and other advertising about every 2 or 3 ads. The funny thing is that 99% of those commercials are never trying to TEACH you about credit, they’re just trying to USE your credit, or take advantage of you because of your lack of credit. Today, I want to talk ABOUT your credit, and teach you about how to get your credit score, how to build your credit report/score, what affects your credit, and I will also disprove a few myths about credit scores!


Let’s talk about what’s in your credit report, and who you can get them from.
When you order your credit report from one of the many online companies out there, or apply for credit from a bank or credit card company, they pull it from a CRA.
“What’s a CRA?”
A CRA is a Credit Reporting Agency. In the US, there are 3 major one’s:
- Experian
- Equifax
- TransUnion

From my experience as an Iowa resident, almost all of my merchant credit card company applications pull my Experian credit restoration report (Chase, Citi, & American Express). Occasionally they’ll pull both Experian & Equifax. Capital One pulls from all 3 CRA’s, and Barclay’s only pulls TransUnion. DING!
There’s a great website where people post the state they reside in, and the bank they applied for a card with, to see which CRA was pulled, here:

“David, why does it matter which CRA a bank pulls your report from?”
GREAT question! If there’s a CRA that not many companies are pulling your report from, then it’s basically a free hard credit inquiry for you. For example, for me, my “free” hard credit inquiry comes by applying for credit cards from Barclays bank because they only pull my TransUnion report! Other than Capital One, none of the other cards I apply for pull from my TransUnion credit report. So while I have to monitor the amount of inquiries I have with Experian & Equifax and schedule my applications wisely — anytime a hot Barclay’s offer comes along – I POUNCE!  Speaking of that, there’s a 40,000 mile after first purchase US Airways Mastercard from Barclay’s listed on my TOP DEALS PAGE which is from Barclay’s!
Been there, done that :)

First things first, by US law, you are allowed one free credit report a year. The website to obtain your free credit report from all 3 CRA’s is
So there is absolutely NO reason for any US Citizen to not check their report at least once a year. Many people will find WRONG information in their report, that could be costing them higher interest rates on loans, or denials of application for credit.  In every credit report it will list the CRA’s contact information to dispute any false information.

True Story:
I was talking to a friend just the other day who was seeking advice to get her first mileage earning credit card. I instructed her on how to check her report and score first, as that is very important. She was pretty confident she had great credit and a great score. She did, except for the wrong information on her report for being an authorized user on a card 7 years ago, in which that person never paid the balance. She was removed from the account years ago but the bank never reported the update to the CRA, and her credit report has suffered for it ever since! The good news is that she is not in the wrong, and submitted the dispute to the bank and the CRA and they are fixing it as we speak. Had she not checked her credit report though, she would have never known it was still falsely lingering there and could still be affecting her!

Tip of the Day:
- Know your credit score, know what’s in your credit report, & fight what shouldn’t be.

Earlier I listed the government sanctioned site for a free credit report once a year from all 3 major CRA’s:

My only pet peeve with that site is that you have to pay $8 at the end to view your FICO score. Not very many sites will give you your true FICO score though, so I DO recommend paying for it. I also recommend saving the information from your credit report such as your hard inquiries with dates, & your scores to your computer in a document. I refer to hard inquiry information regularly b/c I only get 1 free credit report a year, and it’s important for me to know when credit inquiries fall off my report. Which is every 2 years.
The other 2 sites that I use regularly to check my credit score and report info are: – get your credit repair business up and running with Epayments Global. – get a free credit score based off your Experian report every month. – Get a free DAILY score, “Vantage Score” (Different estimate/scale), & “Insurance Score” all based off your TransUnion report DAILY, for FREE!

I update my scores on Credit Karma every day that I’m on the internet. Sometimes when I’m traveling I miss a day, but I try not to :)
Doing this lets you see what happens to your score as balances go up and down on your credit cards, and as you apply for and receive new credit cards. It’s not your true fico score, but it’s a close estimate.

The picture at the top of the page is a screenshot of my pretty new, just 3 day old credit score of 756 by Credit Sesame’s system, which is based on my Experian credit report. This is after just applying for 3 new credit cards in December. It dropped 27 points from the prior month due to the 3 new credit inquiries, and a higher balance on my most recent card statement for booking a significant amount of travel for friends which is all paid in full now. However, as you can see, I still have the “Excellent” Badge and have higher than a 750 credit score which is fantastic. I pay off my credit cards in full every month, so the score will shoot back up next month. The site that I check daily, CreditKarma, already launched my score back up, because they update my score daily, and a new bill posted already with a much lower balance (what I spent last month).

Speaking of lower credit card balances and scores going up and down every month…
Tomorrow, I will post volume 2 in the Basics Steps series on Your Credit Score:
“CREDIT UTILIZATION RATIO:  What is is. How it works. Why it matters”

Trackbacks for this post

  1. Beginner’s Steps #1: Your Credit Score v.3 – “Hard Inquiries, Soft Inquiries, & Age of Accounts” | Travel and Credit

Leave a Comment