Free credit scores and credit reports

The free credit scores can be obtained at the time of the free credit reports. These credit reports are available to all citizens of the U.S as per the FACT or the Fair and Accurate Credit Transactions Act. These credit reports are available from the three main credit bureaus. Usually the credit reports are available for free but the credit scores have to be purchased at the time when credit reports are generated. With these credit scores consumers can understand their purchasing powers better.

Understanding your purchasing power

Generally all borrowers think that credit scores are only for lenders and helps in evaluating their financial potential. But credit scores can be useful for the borrowers also. Credit scores help the borrowers to understand their initial purchasing powers. Through these credit score they can understand their potential for getting a loan and the interest rate at which the same can be availed. Once they are aware of these credit scores, planning for future financial tools also becomes an easy task. If the borrowers over estimate their purchasing powers then it can be disappointing not to get loans at their desired rates. But by checking their credit scores they can plan out their finances better.

Different kinds of credit scores

Credit scores can be rated at different levels. This depends mainly on the FICO scores which range from 300 to 850. The FICO score can be easily obtained online along with free credit scores. The scores ranging from 700 - 850 are considered to be excellent credit. The scores ranging from 680 – 699 is good credit while 620 - 679 is average credit, 580 - 619 is low credit and 500 - 580 is poor credit. The scores ranging from 300 - 499 are considered to be bad credit. On the basis of these scores the amount of the loan, interest rates and other related factors are determined.

Getting your free credit scores

Borrowers can get their free credit reports from online sites of companies which provide credit reports. These reports are entitled to borrowers once in 12 months. There are also options through which these reports can be availed every 4 months through each of these 4 bureaus. Checking these credit reports regularly keeps a track of the credit score along with eliminating the risks of inaccuracy or misinformation by comparing these three different reports. FICO scores can also be checked separately.