For a long time, credit scores seemed like such a mystery to me.
After all, you can only pull your credit report for free once per year, and that doesn’t give you your actual score. Instead, you have to dig through page and pages of data to guesstimate what your credit score might be.
The only time you can really find out your credit score for free is when you apply for credit or a loan, and let’s be honest: That’s not really free, is it? Usually, you go to the bank, fill out a bunch of paperwork, and only then is your credit score pulled by the bank. Now, they’re obligated to give you a copy of your score, and what you see may shock you.
I remember being shocked by my credit score the first time I through about buying a house (at 21, mind you), and ever since then I’ve been determined to find ways to monitor and maintain my credit.
Why Should You Monitor Your Credit?
Your credit score is just a like a grade that lenders see. They use that grade to determine whether or not they want to lend to you. Your credit score is based on several things:
- Payment History – 35%
- Amounts Owed – 30%
- Length of Credit History – 15%
- Credit Diversity – 10%
- New Credit – 10%
Payment History – The single biggest factor in determining your credit score is whether or not you make your payments on-time. Seems simple enough, but most of us have probably missed a payment here and there. Above all else, even if you’re struggling with debt, make your payments on time, as doing so is the most important factor in maintaining your credit score
Amounts Owed – Perhaps you’ve heard this called debt-to-income ratio? Your credit score factors what percentage of your income goes to debt payments as 30% of your score. What percentages are optimal? Lenders like to see a debt-to-income ratio of less than 40%, but lower is always better. Further, I don’t know of any lenders who will loan on a debt-to-income ratio greater than 50%
Length of Credit History – The longer your credit history, the more stable you are considered to a lender. Chances are, the longer your credit history has been around, the longer you’ve held down a job and made payments. See how that works?
Credit Diversity – Lenders don’t want to just see a bunch of credit cards on your credit report. What they would prefer is a nice assortment of checking, savings, credit, and loan accounts. Not that you need to have a ton of accounts on your credit, just a variety.
New Credit – Do you have 2 new credit cards opened in the last month? That’s not going to look good to a lender. It may mean that you’re strapped for cash. However, a new mortgage or car loan (assuming your debt-to-income ratio is still low) aren’t a red flag at all.
Credit Sesame is my favorite to monitor my credit – including my actual credit score – completely free! Founded in 2010 by Andrian Nazari, on top of credit monitoring, Credit Sesame offers free identity theft and ID restoration resources.
Credit Sesame provides you with your Experian National Equivalency score, which is not your FICO credit score. This score is very close to your FICO score, and is an excellent indicator of your actual credit score.
Using Credit Sesame
To sign up for Credit Sesame, simply fill out an application on their website. I believe the process took me less than 5 minutes – it’s that quick and painless! They will ask you a few questions to verify your identity, and then you’ll be read to go!
Credit Sesame can be used either on desktop or mobile, but their app is so easy to use, I highly recommend it! When you login, the app’s screen will look like this:
Once the app is open, and you are logged in, Credit Sesame does an amazing job of giving you key pieces of information right on the home screen: Credit Score & Total Debt. As someone trying to get out of debt, it’s nice to have both of these numbers plainly stated each time I log into the app. The app is set up very simply, with information clearly displayed, and it really only takes one or two clicks to access tons of information about your credit.
My Experience –
I have actually been using Credit Sesame for almost 2 years, and I love it! One of my favorite features, though, are the alerts! Recently, one of my credit cards increased my credit without notifying me. I would have even known until the end of the month (or later) had Credit Sesame not notified me. For me, the credit increase was actually a good thing, but think about how valuable an alert from Credit Sesame could be if your identity was stolen!
More Features –
In addition to your credit score, Credit Sesame provides some really cool features for free with every account. Credit Sesame provides recommendation for refinancing or more cost-effective credit options based on your accounts. You see your personalized recommendations with just a click, and Credit Sesame displays information like interest rates, rewards, and promotional interest rates very clearly.
It is through offers like these that Credit Sesame is able to provide you with your credit score and alerts absolutely free. When you sign up for a credit offer through their site, they make a commission. This way, you get invaluable information and Credit Sesame gets to stay in business.
Credit Sesame – The Best Option
In today’s market, your credit score an essential part of your financial success. Credit Sesame is a fantastic resource for monitoring your actual credit score, taking so much of the mystery out of credit! For someone like me, who likes all of her information to be compiled in one place, Credit Sesame is my go-to for monitoring my credit, and of course, receiving my absolutely free credit score.
*I was compensated for this post, all opinions are my own. Read my disclosures for more information.