During these tough economic times, it's important to keep track of your credit score and your credit report. They are not the same.
We had a viewer write to ask if it's possible to get a free credit score. If someone offers that to you, be cautious.
"Your credit score is typically not free. You will have to pay one of the three large credit reporting agencies anywhere from ten to twenty dollars for that. However, you should check with your bank. Some banks do offer a credit monitoring service,” said David Hudson of Central Pacific Bank.
Some banks will provide information on what's happening with your credit report and that will include your credit score.
However Hudson says, "you can get a free credit report by going to one of the three reporting agencies - Experion, Transunion or Equifax and every year as a consumer, we're able to get one free credit report from one of the three agencies every twelve months.”
You should know there is a difference between a credit report and a credit score. A credit report includes a complete background on your mortgage, credit card debt, student loans and other outstanding debt. That's a credit report.
"A credit score takes that information, puts it into a mathematical model and generates a score that banks use, and other financial services and providers use to determine a someone's credit-worthiness or ability to repay credit,” said Hudson.
The way to improve your credit score is pretty basic, according to Central Pacific Bank's David Hudson.
Don't over-extend yourself when it comes to using credit cards. And put something in savings.
"We also encourage people to pay themselves first and really to set aside three to six months of liquid savings in an account that they can get to, in a savings account,” said Hudson.
If you have a question for our financial experts, e-mail us at dollarsandsense@khon2.com.
