It is not uncommon to be worried about your credit scores if you are dealing with a difficult financial situation. After all, credit scores are used by lenders to determine the “creditworthiness” of potential borrowers. Credit scores can affect your ability to secure loans or certain types of employment. Although credit scores are not as important as you may believe, as they are not permanent, there are several ways to obtain your credit scores if you have concerns.
Lenders use various types of credit scoring methods, such as FICO and VantageScore models. You can pull these scores from several sources:
- Bank or financial services. You could pull your credit scores by signing up with a service, such as Credit Karma, which uses VantageScore models. FICO allows you to purchase your FICO credit scores from their website. Additionally, you may be able to pull credit scores from services sold by your bank. Certain credit cards may also provide access to one or more of your scores.
- Loan documents. Some loan documents may contain one or more of your credit scores. If you recently applied for a loan and received a rejection letter, then it is likely the lender sent information about its decision. This can often include details about your credit history or your credit scores. You may also receive documentation from any of your current lenders.
You should consider focusing less on your credit scores and more on your credit history. There is more detailed information about your finances on your credit reports. Fortunately, you can pull your credit history from the three credit bureaus for free once per year.
How to Pull a Free Credit Report
TransUnion, Experian and Equifax are the three credit reporting agencies that compile information on your financial history. You can pull a free report from each agency once per year.
However, the process can be tedious if you are not prepared. You will need to answer detailed questions about your personal and financial history during the application process.
Applications for any of the agencies could ask questions about where you lived in the past or specific loans. Be prepared to begin each application with paperwork in hand.
Why is a credit report more useful than a credit score? With a credit report, you have far more details at your disposal. Your report may list lenders, accounts in collections, and the amount of debt you owe. It is much easier to develop a strategy with this information than it would be with your scores alone. If you are going to use your credit report to improve your finances, then you can use your credit scores to mark your progress.
Should I Care About My Credit Scores?
You should care about your credit scores. However, you should not spend an excessive amount of time worrying about your credit scores. If you are facing a dire financial situation, then chances are credit scores are the least of your worries. Past-due debt can lead to wage garnishments and property seizures. You should also remember that credit scores are not permanent.
Improve your credit scores by making timely payments and keeping a healthy debt-balance ratio. Lenders are looking for stability more than anything else. Credit scores are simply one of several metrics they use to gauge stability.
Bankruptcy may be an option to consider if you are facing serious creditor collection actions. If credit scores are what is keeping you from filing for bankruptcy, then you should know that it is possible to begin improving your scores shortly after your case concludes. The consequences of waiting to file are likely going to be much worse than poor credit scores, which would likely continue to decrease because your debt problems would still exist.
Author: Sader Law Firm
We can assist with Chapter 7, Chapter 11, and Chapter 13 Bankruptcy. There is a lot of misinformation about bankruptcy. If you have found yourself in a difficult financial predicament, you owe it to yourself to find out the truth. We look forward to helping clear up the bankruptcy myths and get you on your way to a fresh start. Call us today for a free consultation at 1-800-705-5457.