Credit Monitoring: Best Companies of 2017

Expert Answers to Your Top 5 Credit Report & Score Questions

1. What is a Credit Report?

A credit report consists of four main things: personal information, inquiries, public records, and credit history. Your credit report is basically a detailed document that shows creditors your entire financial profile in one place. This report is used when determining your creditworthiness and will affect your ability to be approved for credit accounts like auto loans, home loans, credit cards, and more.

2. How is My Credit Score Calculated?

Credit scores are a numerical representation of your creditworthiness. Generally, credit scores are calculated using these five things:

• 35%: Payment history
• 30%: Amounts owed
• 15%: Length of credit history
• 10%: Types of credit
• 10%: New credit

3. Why Do I Need to Check My Credit Score?

You absolutely must know your credit score if you want to be in control of your finances. Your credit score affects every part of your life from your ability to get a home loan to your ability to get a job. If you know your credit score, you are much more likely to have a good one! By tracking your score and report, you can make sure it's always accurate. If something inaccurate or old is reported, you'll be better prepared to tackle it right away.

4. Is Credit Monitoring Worth It?

This depends on where you are in life. If you're checking your score frequently and it's consistently stable and reporting correctly, you may not need credit monitoring. But, if you're struggling with your credit, working on repairing it, have a low score, don't know what's on your credit report, or want to take more control over your finances to get to a more stable place, credit monitoring is absolutely worth it. After you find a reputable credit monitoring site through our reviews above, you'll be able to constantly check your credit report, be alerted of any changes, and know your credit score at all times. When you're trying to rebuild, or build, your credit, you need to be aware of what's being reported about your financial profile. Credit monitoring is something you should be budgeting for and investing in. You don't need it forever, but when you're in any sort of transitional stage, it's absolutely worth it.

5. What is a FICO score? And What is Considered a Good or Bad Score?

A FICO score is the original credit score and is used by 90% of all creditors. Your FICO score will always be between 300 and 850. Below 640 is considered a very poor credit score. With this score, you are considered "subprime" and most likely will not be approved for new credit, or you'll get less than ideal interest rates on new credit accounts. 641 to 720 is considered a decent to good score, but 721 or above is considered excellent. Most consumers fall in the 621 to 720 range.