Many people are confused about online advertisements of free FICO scores and reports. The truth is that the Fair and Accurate Credit Transactions Act (FACT) entitles every US citizen to get free credit reports annually from the major credit bureaus Experian, Equifax and TransUnion. Note that the FICO score is not available for free and you need to pay between $4 to $7 to get your FICO credit score generated from your latest credit report.
If you need another credit report from the same bureau within the same year, you will have to pay for it since you only get 1 free report a year. This is a very small price to pay for people who need to rebuild their credit score to 700+ and must regularly monitor their reports for mistakes and updates. They are probably in a hurry to qualify for unsecured credit cards and large loans with cheaper interest rates that are only possible with a 700 FICO score. If you want to get a fixed rate mortgage loan to take advantage of the low rates available now, you will be paying to generate your latest FICO score every month to see improvements.
Many people suffer because they borrow too much money beyond what they can afford. This is especially dangerous when they take installment loans with bad credit in order to borrow $10000 or more. However, the high interest quickly overwhelms them and they start falling behind payments. The result is damaged credit and a FICO score under 500.
There are many credit monitoring services that can help you rebuild credit as well as track changes on your credit report for a fee. These are more convenient compared to generating your FICO score yourself, and you get free sms alerts whenever there is a change in your report. In fact, these companies are the ones advertising free credit scores to bring in new customers for their credit repair services.
However, there are some companies that offer free FICO scores when you order your credit monitoring services from them. And this is probably what confuses many consumers. They have heard of free reports by the FTC but most lenders are only concerned about their FICO score, so why get something for free when it is not useful? Your FICO score is generated from your credit report, and you can use the free reports to periodically check for mistakes 3 times a year. You only need to pay for the FICO score if you are in the midst of rebuilding your credit and want to see the progress. Otherwise, you can simply go ahead and get the best installment loans with poor credit though the lenders will certainly verify your FICO score.
Since Experian, Equifax and TransUnion will each provide you a free credit report annually, you can monitor your credit files once every 4 months for free. Even though the reports from each bureaus tend to be slightly different, there is no need to check all of them at the same time, unless you detected identity theft and cause you credit damage.
Note that many free credit score offers are not providing the real FICO score. They simply generate a score based on a different model and that score is not recognized by lenders when you need to borrow 900 loans fast. It is straightforward to get your free annual credit report and scores from the official site www.annualcreditreport.com set up by the FTC.