Why Should You Buy Your Credit Score?

You can get a copy of your credit report annually for free.  Unfortunately, the report doesn't contain your actual credit score- as those are typically not free.  Credit reporting agencies, and Fair Isaac both profit from the sale of credit scores.  The average price to obtain your three credit scores from the 3 major credit reporting agencies is about $45.

Why Buy a Score?

There are certain instances in life where having your actual score might be convenient and useful to you as opposed to just having a copy of your credit report.  When you are looking to get approved for a mortgage, it is extremely useful to know what your credit score is.  Mortgage lenders can charge a few hundred dollars in order to apply for the mortgage- having the score before you apply can save you time and money in the long run.  Your score will give you a good indication if you have a chance of obtaining a mortgage with a particular company or not.

Having a higher credit score will also result in a lower interest rate on money you borrow.  You can ask lenders what credit scores result in what specific interest rates before you apply to get a good understanding of where you stand with a variety of lenders without going through the application process with each one.  Additionally, you won't have to have as many inquiries to your credit report if you buy your scores and use them as a preliminary "shopping around" tool.

When Not to Buy a Score

If you are looking for credit that does not charge you an application fee, then there is probably no real reason to pay money to obtain your credit score.  Lenders of credit cards and personal loans for example, consider more than your score to determine whether or not to extend you credit.  For example, your income and job history is very important to a potential lender. 

When you are considering a personal loan or a new credit card, it is feasible to obtain a free copy of your credit report and go over the contents to get a good indication of whether or not you will be approved.  You can actually have a good idea whether you have a high, medium or low score just based on how many soliciations you receive from credit card companies.  If you are receiving many offers with great interest rates and introductory offers- chances are you are in the medium to high range of credit scores.  If you rarely receive offers, or get offers that have high annual fees, high interest rates or other undesirable features- chances are you are in the medium to low credit score range.

Understanding How to Have High Credit Scores

In most cases, it is more important to understand the purpose of a credit score and how people have high scores than it is to know what your specific score is.  Credit scores are used to determine an individuals credit worthiness, so as long as you are consistently working to improve or maintain a strong credit score- you don't need to know your actual number.  Make your payments on time, all the time, and avoid excessive credit use- and you'll be on your way to getting (or keeping) a good credit rating.