What is my credit score? Why is it important? How do I check my credit report?

What is a credit score?

A credit score is typically a three-digit number based on your financial history to analyze and determine your creditworthiness. The higher your score, the better off you are! Credit scores are used by lenders (banks, credit card companies, etc) to gage your financial responsibility based on your past financial behaviors. Credit scores are calculated from information in your credit report. Things that affect your credit score, both positively and negatively, are paying bills late or on time, the type of credit you use, how much credit you have available to you, how much you owe on your credit cards and loans, how long you’ve held outstanding credit (how long you’ve had a credit card, for example), and whether you’ve had a lot of inquiries from prospective lenders.

Why do I care about my credit score?

Your credit score will have an important impact on the interest rate you will pay to borrow money. This includes the APR (Annual Percentage Rate) on your credit card, the interest rate the bank charges you on a loan, etc.

Credit scores are also used for purposes other than evaluating how likely you are to default on a loan or make late payments. For example, insurance companies are now using low credit scores as an indicator to identify irresponsible individuals, or ones they believe are more likely to make insurance claims against their policies.

A credit score is NOT included in a consumer credit report, but it can be purchased separately.

How can I check my credit report? The ONLY site to offer you a truly free credit report is AnnualCreditReport.com. This is a secure website. Do not be fooled by other sites claiming to give you a free credit report, it will not end up being free!

This site allows you to request a free credit report once every 12 months from each of the three nationwide consumer credit reporting companies: Equifax, Experian and TransUnion. So technically, you can get three free credit reports each year.

Your credit report includes personal identification information (name, address, date of birth, social security number, employment information), public record information (bankruptcies, foreclosures, lawsuits, wage attachments, liens), and collection agency account information. By law, your report will never include your race, color, religion, national origin, sex, and marital status.

It is a good idea to check your report three times a year (once from each company) to make sure your identity has not been stolen and to check for inaccuracies or discrepancies. You can also check all three reports once a year, whichever you prefer.

If you do not feel comfortable using the website to request your free credit report, you can also request it by phone or through the mail. To request your credit report by phone, call 1-877-322-8228. To request your credit report by mail, download the request form from the website above, print and complete the form, and mail the completed form to

Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281

For more information, a good site to visit the ConsumersUnion.org Credit Matters Facts Sheets.

Written by: Jessica Sturdy, Peer Educator, Financial Wellness Program, University of Illinois Extension, 2009. Revised in 2013