When’s the last time you checked your credit report? Chances are you haven’t done so in a while. The National Foundation for Credit Counseling's 2014 Financial Literacy Survey revealed that in spite of being able to obtain an annual free copy of their credit report from AnnualCreditReport.com, 65% of Americans had not ordered their credit report in the past 12 months.

That’s risky, because undetected errors on your credit report can cost valuable credit-score points and contribute to loan denials – and higher interest rates if you are approved for a credit card or loan.

There are several ways consumers can review their credit report – or different versions of their credit score – free of charge. But the first step to taking that much-needed look is understanding exactly what you’re looking at.

Reports vs. Scores

A credit report and credit score have very different objectives, says Gail Cunningham, a spokesperson for the National Foundation for Credit Counseling. “A credit report is a track record of a person's financial activity, both past and present. It provides a snapshot of who the person is financially,” she says. It includes information about your residence (past and present); bill-payment history; any bankruptcies, foreclosures, tax liens or other financial judgments against you; and the balance and monthly payment of any credit accounts, as well as the age of each account.

“A credit score is a numerical reflection of the information in a person's credit report," says Cunningham. "It is used by lenders to evaluate risk and plays a strong role in determining whether or not a person will be extended credit."

One's credit score is a mathematical number ranging from 300 to 850, created by the Fair Isaac Corporation (FICO) to determine the likelihood that a consumer will pay his or her bills on time. You actually have two credit scores – a FICO score and a FICO educational score, also known as the consumer score.

“The FICO score is the one used by creditors and lenders,” says Harrine Freeman, CEO and owner of H.E. Freeman Enterprises, a credit repair and counseling service in Bethesda, MD, and author of “How to Get Out of Debt.” The FICO educational score is the one available to consumers in a variety of ways.

Your scores are calculated based on information pulled from your credit report including credit history, total debt owed, length of credit history, type of accounts and new accounts. Income and employment history are also factored into a FICO score, but not necessarily into an educational or consumer version of the score, says Freeman.

What’s Free, What's Not

The Fair And Accurate Credit Transactions Act passed in 2003 calls for all Americans to have free access to each of the three bureaus’ (Experian, Equifax and TransUnion) credit reports once every 12 months. AnnualCreditReport.com, a site sponsored by the three credit bureaus, is the easiest and most comprehensive site to use to obtain those free reports.

You can also receive one free credit report if you have been a victim of fraud or identity theft, have been denied credit or have had a change in your current credit (interest rates, credit lines, etc.) as a result of your credit – or if you’re offered a higher interest rate than other consumers get from a creditor.

“A person denied credit or who has an unfavorable change to the terms of their agreement will be sent an adverse action notice informing them of the denial or change," says Cunningham. "The reason for the change will be included in the document, along with the name and address of the credit bureau which supplied the information. In that instance, consumers can obtain their credit report for free within 60 days of the denial.”

However, the law does not provide an annual free look at your credit score. And you can't obtain a free credit score via AnnualCreditReport.com. But that doesn't mean you can't see those three little numbers for free. Since 2011, adverse credit-related actions such as changes in credit limit or interest based on a credit score give consumers the right to view the credit score used in the determination.

“You can also purchase your FICO score,” says Cunningham.

MyFICO.com allows consumers to purchase their FICO score from any of the three credit bureaus for $19.95 per FICO score report. You may also purchase the consumer version of your credit score directly from one of the credit bureaus or other sites, but beware: That number may be different (usually higher) than your FICO score. MyFICO says a person’s consumer score could be as much as 40 points higher than their FICO score.

“This is why the lending process is confusing,” says Cunningham. “The three-digit number a lender uses may not be the same number a borrower sees. That’s why – despite sites offering free scores – it is worth it to purchase the FICO score, since that’s what is used by 90% of creditors and lenders.”

A Free Snapshot

​Despite the differences, if you want to see the consumer version of your FICO score, the most reputable sites include:

“Consumers need to understand these are not affiliated with the mandated government website AnnualCreditReport.com, and the credit score provided is not a FICO credit score, which is used by a majority of potential lenders,” cautions Freeman.

These sites don't require you to provide your credit card to check your score, which means you can check it as often as you want at no cost. “The caveat is, I’ve seen these scores be inflated as much as 60 to 70 points higher than the FICO score banks and other lenders will see,” says Pamela Capalad, a certified financial planner and adviser in New York City.

“You may also be able to obtain a free copy of the FICO score lenders and banks see by requesting the score from a creditor or lender if you’ve recently applied for credit,” says Freeman. Some lenders will share that information even if you haven't been denied credit.

Even though free consumer credit scores aren’t FICO scores, there’s a good case to be made for reviewing them. “They can be great indicators of overall credit health, alert consumers to potential fraud issues, etc.,” says Thomas Nitzsche, senior media relations coordinator, ClearPoint Credit Counseling Solutions.

And check your wallet for a free look at your credit score. Some credit cards, such as the Discover it® Card, offer you a free FICO score (the genuine banks-and-lenders version) based on your TransUnion credit report once every month with your statement.

The Bottom Line

Your credit score hinges partially on your credit report. And potential creditors like to review your credit report and score before deciding to offer you a loan, increased line of credit or credit card. To ensure you’re approved for a loan, or receive the most attractive interest rates, it’s best to pull one of your free credit reports a minimum of once every four months to maintain the highest possible credit score.

It’s also worthwhile to review your score every three months. Even if the free score isn't exact, it will indicate whether your score is going up or down.