Free Credit Score - No Credit Card Needed

Often the word "free" gets thrown around far too liberally, especially when it comes to services or products marketed online or via retail websites. There is much talk about getting things free only to find a catch in the offer.

Similarly, finding a service that provides a free credit score or report can be difficult, especially one that doesn't ask for a credit card number, or demands subscription. Not any more, here we profile a site that provides credit score absolutely free, and highlight some of the prominent features it offers.

You can get your credit score absolutely free from the website Credit Karma. It retrieves the credit report from one of the three bureaus (Equifax, TransUnion and Experian) without asking for a credit card number. It doesn't ask for service payment and offers complete free credit scores, no strings attached. This service is supported by on-page advertising.

Based on the data in your TransUnion credit file, Credit Karma provides you a TransRisk score and also your VantageScore, both of which are commercially available to lenders. In fact, VantageScore  is marketed and distributed by all three of the national credit reporting agencies and is largely viewed as FICO's most potentially significant competitor.

The site breaks down or rather categorizes your score into the percentage of on-time payments, number of accounts you have open, age of open credit lines, and if you enter your income, Credit Karma even displays your debt to income ratio.

Credit scores were the brainchild of the Fair Isaac Corporation (FICO), that developed a methodology to calculate them, in 1958. There are currently three credit bureaus that give out credit scores, namely Experian, TransUnion and Equifax.

Credit scores lie between 300 and 850, and anything below 500 is not worthy of even considering for a loan, regardless the terms or the interest rate. The higher the credit score, the more credit worthy the borrower, and that is the most important use of credit scores. These credit scores are used to effectively judge the credit standing of unknown person.

No matter who you are, you will only get cheap loans if you have a good credit score, because there are no friends in the credit business.

Credit cards are essentially databases that contain your entire credit history, ranging from where are you most likely to spend, on what and even with or for whom. They even know your habits and payment or credit mentality. It is no wonder then, that credit cards form effective credit monitoring tools for other credit agencies.

So, if you wish to generate a credit report or a credit score, all you need to do is tap into this database and compile all the information to get whatever you want. This is not as easy as it sounds, and hence, it is very rare to come across a free credit report advertisement.

Holding a good credit score puts you at a vantage point. Lenders are getting more and more cautious about lending money without checking their repayment ability. They demand more knowledge on who the person is, what will he be using the money for and how good is his financial standing (will he be able to pay it back with interest).

With so many parameters to research for every individual who applies for a loan, banks and financial institutions surely have their hands full. Credit scores give all such information to them, neatly packed in a particular range of credit scores. If you fall in the upper range of credit scores, you are a good, safe bet to finance with a loan.

Credit scores, save the lender from researching every individual and also make the borrower's life simpler by giving them easy access to loans, without filling out long, informative forms explaining each detail of themselves. Also, credit scores lend the aspect of credibility to the individual's own credit statements, making him a worthy loan candidate.

As credit cards are the stock house for information pertaining to an individual's credit standing, his credit usage habits and his payment methods and status, credit scores are very difficult to get without disclosing the individual's credit card details. Always try to improve your credit scores and always aim to be a low credit risk.