The concept of credit is a lot more complex that many individuals may currently realize. Even though there exists a general misconception that credit only relates to paying for something with borrowed funds, the reality of the matter is that the entire global economic system depends on credit and liquidity. The idea behind credit is to provide a way to introduce the necessary funds into the economic system, while holding another asset, which may not be easily liquidable, as collateral. Small and medium businesses around the world depend on such loans for expansion, as using their revenues and profit to finance every business operation would significantly slow down their growth, thus reducing their market share as well as workforce. On the other hand, every general consumer wishing to purchase a car or a house will normally seek credit and apply for a loan, using their potential future earnings, as well as the purchased asset itself as possible collateral. However, since every individual might have a different future income potential, every creditor will first have to carefully analyze the applicant's creditworthiness, usually by checking their credit score, and then decide whether they are a good risk or not.
Consequently, every applicant seeking to apply for a loan in the near future should first check their credit rating themselves. Even though many applicants may still not be aware of this, having your credit score checked and analyzed by a credit granting agency may in fact negatively impact your credit score. However, doing so in a fashion that does not involve a 'hard' credit yourself will not count score check counted against you in your report. First of all, by law every American is allowed to check their credit score for free every year, and you should never fall for a scheme that asks you to pay for a credit score check. Currently, there are three credit reporting agencies backed by the federal government - Experian, Equifax, and TransUnion - and each will use a slightly different metric to calculate your score. However, when you receive your credit scores, the ones provided by the three agencies may sometimes differ significantly enough that a credit looking at only the lowest one can actually deny your loan application. On the other hand, there is another legal stipulation that specifies that every denied application for a loan must also explain the reason for denial as well as provide the applicant with their specific credit score, if it had played a role in rejecting their application.
Currently, the most popular way to receive your credit score quickly and for free is to use one of the several credit reporting services available on the internet. However, every user should be careful when signing up for any services, as some of them will offer to check the score for their users only after they also sign up for another paid portion of their services. Therefore, every user should first make sure that their chosen service is a reputable one, and they will not be hit with any hidden fees after any possible trial periods end. One of these more reputable credit score internet services is CreditKarma.com, which offers its users a free way to check their current credit score, as well as obtain a list of best credit card offers for their current credit rating.