How to Track All 3 of Your Credit Scores

Your credit scores are never more important than when you are about to buy a home. That pesky 3-digit number can lower or raise your interest payments by tens of thousands of dollars over the life of a mortgage. So it was no surprise when a reader named Kelly sent me the following email:

I am looking to have my middle score at a certain number for a home purchase and would like to start monitoring before formally applying for the loan.

Great topic and a great strategy when you’re planning to apply for a mortgage. By monitoring your credit scores in advance, you avoid negative surprises at application time, and give yourself time to correct errors.

So what’s the best way to monitor your credit? We’ll look at some tools to help you do that. But first let’s cover some general information as it relates to credit scores.

Listen to the Podcast on how to track all three credit scores

Credit Scoring Basics

It’s important to understand that you don’t have one credit score, but three. Actually, you may have as many as fifty, but the three most common – and most used by mortgage lenders – are issued by the three major credit bureaus:

  • Equifax
  • Experian
  • TransUnion

Mortgage lenders will pull the three scores from each of the reporting agencies. They do this because there typically are differences in the score from one agency to the next. These differences are the result of each of the credit bureaus having slightly different information on a consumer. Mortgage lenders use the middle score. So if my three scores are 770, 780, and 790, the lender will use 780 as my representative credit score for the purpose of the loan.

A difference of even 20 points can mean a higher or lower interest rate. Mortgage lenders base credit on credit tiers. A 20 point difference could drop you from the 720+ tier down to the 700 – 719 tier, resulting in a 1/8 increase in the rate you will pay on a 30 year mortgage.

For example, a a score of 730 might get you a rate of 4.00% in today’s market. A score of 710 may result in a rate up tick to 4.125. On a $200,000 mortgage, that will increase your monthly payment from $955 to $969 – a difference of $14 per month. While that may not seem like much, over 30 years that will add up to $5,040. That’s why it’s so important to monitor your credit scores before a taking a major step, like applying for a home mortgage.

So what Kelly wants to do – correctly – is to track her middle score. How do you track all three?

There are different ways to do this. Some options will cost money, while others are free.

1. MyFICO

The easiest, most reliable – and most expensive – way is through myFICO, which is run by Fair Isaac Corporation, the creator of the FICO score. You can subscribe to the service and monitor your credit reports from all three bureaus and your three FICO credit scores. One place, all three scores.

The downside to this service is the cost. It’s $19.95 per month, and there’s a three month minimum requirement. So even if you just want to see a snapshot of your scores, you’ll have to pay a minimum of $60.

If you’re going to buy a home, myFICO is an excellent way to monitor your credit and deal with problems before submitting a loan application, particularly as you get very close to applying for your mortgage.

2. Credit Cards

Several credit card companies now give you free access to your FICO Score. Discover, Capital One and Barclaycard are three credit card companies that do offer free credit score access. However, they don’t all provide your official FICO score, nor do they provide scores from all three credit bureaus. Typically, they’ll offer just one score.

Capital One, for example, uses a non-FICO scoring model based on your TransUnion credit data. That said, the score is still a good barometer of where your credit stands and is an excellent tool to monitor your credit for general credit score range.

Capital One Credit TrackerCapital One’s scoring model is based on six categories:

  • On-time payments
  • Oldest credit line
  • Credit Utilization
  • Recent inquiries
  • New accounts
  • Available credit

In each category, you’re score is based on A, B, C and D grades. You can also click on any category and run “what-if” scenarios. For example, you can look at what having no late payments for the next 12 months will do to your score. Or you can measure the impact of a late payment.

When I did this, I found that one 30 day late payment on my credit drops my score from 780 to 739. A 60 day late drops it to 727, while a 90 day late drops it to 718.

Among large credit card issuers, Citi is slated to offer a similar tool in January, 2015. But curiously, Amex and Bank of America don’t offer it.

3. Credit Sesame

This is also free, but it bases its data on Experian. Credit Sesame reports my score at 818. The app also shows broader financial information, such as the value of your home and debt-to-income ratios based on your estimated income.

Just like with Credit Concierge, you have to provide your name, address and social security number and answer a few questions to make sure you’re who you say you are.

5. Quizzle

Quizzle is similar to the others, and also free of charge, but it’s based on Equifax. My score here was 807, so you can see that despite using many different credit score sources, they’re all in the same ball park on scores.

Summary

If you just want to monitor your credit scores on an ongoing basis, use the free options. Use the paid services only when you get close to getting a new mortgage.

You can see all the credit score links listed in this post on this page How to Get Your Free Credit Score (with no credit card).

Topics: CreditPodcast

8 Responses to “How to Track All 3 of Your Credit Scores”

  1. James Humphrey

    As an FYI the 2015 version of Quicken Premier gives a free Experian credit score and it appears that the number will be updated quarterly at no charge.

    Also Q2015 includes a variant of the investment analysis report “Investment X-ray” from TD-Ameritrade.

    IMO Quicken/Intuit is a get you in and then hold you software solution but it is something to consider.

  2. Oldunshavenone

    I’ve found that Credit Karma is a good judge of credit score and also a free website but doesn’t fill up your email inbox with offers like Credit Sesame does. You even have CreditKarma in your disclosures at the bottom of this page even though there’s no mention of it in your article.

  3. Monitor the credit score is not an easy thing. If we subscribe to FICO, it is expensive. Unless we have sufficient funds.
    If we try to get a free report, the result is less complete as you described.
    But, we better get a free report than doesn’t receive a report. We’ve got information on our credit scores.
    We can learn which factors could increase the score and which ones make our score down. With this information, we can improve it for next time.
    If we are enough funds, the better is we subscribe to the FICO. Thank you.

  4. Credit Karma: free Transunion (TU) and Equifax VantageScores, updated weekly.
    Capital One Creditwise: Free TU VantageScore, updated weekly.
    Credit.com: Free Experian VantageScore, updated twice a month.
    Mint.com: Free Equifax FICO score, u dated monthly (recently changed from every 3 months).
    I pay for my TU FICO every 4 months ($19.95 each time to see 9 different FICO scores). Still looking for a free way to view my Experian and TU FICO scores (not VantageScores) for free.

  5. Could not agree with you more…go with the free services for monitoring, but go pro when a big purchase is around the corner. Perhaps another case would be to monitor a bit more closely if you’ve been the victim of identity theft.

Leave a Reply