Experian gets personal to teach about credit, but it'll cost you

Call-in service promises personalized answers to your credit questions

By Jeremy M. Simon

Got a question about your credit report? A major credit bureau is now offering consumers the chance to have their questions answered over the phone by a real, live person -- for a price.

Experian this week announced the launch of its Credit Educator service, which allows consumers to have their credit report and credit score questions answered over the phone. For about $30, consumers get a copy of their Experian credit report, their VantageScore credit score and phone time with an Experian agent. The more commonly used FICO credit score is not included.

What does that phone call offer to consumers? "It's a one-time, educational, one-on-one classroom-type session tailored to their specific credit report," says Michele Pearson, Experian's vice president of credit services.

"We're here to proactively take them through their credit report," Pearson says.

Experian says it is the only credit bureau to offer telephone-based education. (Although Equifax didn't respond to requests for comment on their plans for any similar offerings, TransUnion says it is the only bureau that offers free phone access to customer service representatives.) The service may be helpful, experts say, particularly for consumers who lack a clear understanding of the credit reporting process.

"It sounds like this is something a consumer would like to know and would help them with behaviors that would affect their credit score in a negative way," says David Jones, president of the Association of Independent Consumer Credit Counseling Agencies (AICCCA). In this case, that credit score is the VantageScore, which launched in 2006 as an alternative to the FICO score. By some estimates, VantageScore today makes up less than 10 percent of the credit scoring market. 

Not everyone is so sure about paying Experian for credit reporting insight, however. "Consumers should become knowledgeable about credit, but shouldn't get their credit education from the foxes guarding the henhouse -- they should get it from independent sources," Ed Mierzwinski, consumer program director for U.S. PIRG, a consumer watchdog group, says in an email.

According to Mierzwinski, "this sounds more like a thinly disguised marketing channel for VantageScore or credit monitoring subscription products." 

Answering questions
Consumers who want Experian's assistance need to first contact an Experian scheduling agent, who will help select a day and time for the call and explain what to expect -- including the $29.95 price tag. "So it's very clear to the consumer what they are paying for," says Pearson.

Ahead of the call, the bureau provides a copy of the consumer's Experian credit report and VantageScore via email or regular mail. Experian also provides a list of terms and conditions that the consumer reads and signs.   

During the call, an Experian credit educator agent can address the consumer's specific questions. These agents -- who, Pearson says, have years of prior experience handling customer calls about credit report disputes -- have received additional training for education calls. Pearson describes the agents as knowledgeable about credit, explaining that they can speak about each element on consumer credit reports. Agents can also discuss what factors may be impacting the consumer's credit score, how to maintain a good credit report and the state and national distribution of credit scores. Pearson says that agents explain that there are other credit scores available and VantageScore is just one of those scores.

According to Experian's press release, agents can address such questions as:

• I paid my bill in full, so why is it still showing up on my credit report?
• How can applying for credit impact my score?
• What are the factors impacting my credit score?
• How do I know if my credit score is good or not?
• What are some actions I can take to optimize my credit score?

"An average call takes about 20 minutes, but our goal is to make sure the consumer understands each element of their credit report and their score. And we'll take the time needed to do that," Pearson says. In other words, Experian says it won't hang up before the consumer's questions get answered.

Still, not everyone is convinced that all of a consumer's questions can be answered on the phone. "That they're saying its credit education is a bit of a stretch," says AICCCA's Jones.

"Consumers need to understand how interest rates work, how their mortgage rates work -- that probably wouldn't be part of such a conversation," he says. 

And U.S. PIRG's Mierzwinski has some additional concerns. The service "provides Experian with an unparalleled opportunity to get consumers to pay Experian while providing additional information that allows it to fill in blanks in their marketing databases," he says in an email. 

Also, Mierzwinski wonders, "what happens if a consumer complains that the report is inaccurate? Experian is supposed to maintain maximum accuracy by law and fix mistakes in credit reports for free by law. This seems like an opportunity to get paid to do what they're supposed to do for free," he says. 

Education needed
The bureau, however, says its aim is to address common credit reporting concerns. Experian tested the new service for several months before launching it nationwide. Even before that, however, the bureau says it had ideas about what consumers want to know.

"Consumers have a lot of questions about how different elements in their credit reports affect their scores," Experian's Pearson says. She notes that consumers are frequently interested about how different life events, such as marriage or divorce, or common financial changes, such as opening joint accounts or co-signing loans, will impact their credit scores.

She adds that regulations now require lenders to provide free credit scores to consumers who have been turned down for loans or given less-than-ideal terms. "That's raising an awareness of consumers wanting to know" more, Pearson says.

Credit counseling groups say consumers can use additional education. "Experian is an expert in the area of credit reports and scores, thus well-equipped to offer this much-needed education to consumers," says Gail Cunningham, vice president of membership and public relations for the National Foundation for Credit Counseling. "Credit reports and scores can be difficult to understand, yet are critical to a consumer's financial future.  This service could be useful to consumers as they struggle to find solid financial ground during these difficult times." 

That's exactly the service Experian says they are offering. "We want to help consumers understand exactly how the information in their credit report has an impact and we want to make sure they are getting credible information," Pearson says.

See related: VantageScore turns 5: What it is, and why it matters, New Fed, FTC rules mean more free credit scores for consumers, How to dispute credit report errors

Published: October 6, 2011

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