Free FICO scores exist, but aren't easy to come by
Dear Credit Score Report,
Is
there any such thing as a free credit score? I'll be getting a new car in about three months. -- John M.
Hey John,
Free credit scores do exist and are relatively easy to find,
but the tricky part is getting the scores lenders actually use.
If you've already applied for a loan or a credit card, it's not so difficult. As of July 2011, new regulations say you are entitled to a free score if you are
rejected for a loan application or approved at less than the best
terms. But what if you want to find your score before you apply?
While you can find websites and other businesses promoting free
credit scores to consumers, these typically aren't the scores banks look to
when making lending decisions. Instead, borrowers should seek out their FICO credit scores, which are used by most U.S. lenders, including the top 25 U.S.
credit card issuers and auto lenders. A non-FICO credit score can
give you a rough idea of where you stand relative to other borrowers. We offer one such tool ourselves: the CreditCards.com free Credit Score Estimator, which will approximate your score based on a few simple questions.
But if you have a loan you want, and especially if you think you might be a borderline case, make the extra effort to obtain your FICO
score before you apply -- even if you have to pay for it. Otherwise, you're unlikely to see the same number that your lender is using.
If you're willing to pay, you can easily purchase your Equifax and TransUnion FICO scores for $19.95 each at myFICO.com. That's up from a previous price of $15.95 each. (There's no way for consumers to buy a FICO score from Experian, the third of the major credit reporting bureaus.) However, if you're dead set on not paying for your FICO score, it may be possible, but it'll take some extra effort.
Under FICO's own Score View (formerly Scores on Statements) program,
participating banks allow customers to see their FICO scores online each month at
the lender's website. FICO has previously stated the program makes free scores available to over 1.5 million U.S. consumers,
with company spokesman Craig Watts noting that a "small but growing number of
lenders either are already using or are preparing to use Score View to benefit
their customers." As for exactly which banks are involved in this program, they'd rather remain
anonymous: The Pennsylvania State Employees Credit Union is the only
participating lender that currently allows itself to be publicly identified by
FICO.
At least two other credit unions -- Digital Federal Credit
Union (DCU) in Marlborough, Mass., and Partners 1st Federal Credit Union in
Fort Wayne, Ind. -- provide their
members with free FICO scores. DCU says its members can sign up to receive the
free FICO scores once a month, via a service that began in March 2010. Meanwhile, Partners 1st has "FICO scores on
our computer system (updated twice annually), and any member may ask us for
their score," says Cindy Emmerich, the credit union's vice president of
marketing, via e-mail.
As for major banks, in an informal poll conducted by the
CreditCards.com editorial team, Bank of America, Chase, Citi, Capital One,
Wells Fargo and USAA customer service representatives said they do not supply
customers with free FICO scores. That list obviously isn't complete, so be sure
to ask your own bank if it offers free FICO scores. American Express offers its
consumer and small business cardholders free online access to their credit
scores once a year, although in the form of the Experian Plus score. That
scoring model is "an educational credit score that can range from 330 to
830, with a higher score indicating lower credit risk," explains credit bureau
Experian's Renee Borsack. AmEx admits that it doesn't use the Plus score in its
lending decisions.
You can also get your FICO score during the home buying
process. Consumers "who apply for a residential mortgage receive for free
the FICO scores used by the lender in underwriting the loan application,"
Watts says.
As noted previously, consumers now also receive free credit scores following loan applications that aren't approved at the best terms. Final rules issued in July 2011 by the Federal Reserve and Federal Trade Commission mean that when a borrower's low credit score results in a credit denial or higher interest rate, the lender must share information about that score. If the score used was from FICO, then the borrower may receive a free copy of their FICO credit score.
Of course, since loan applications can lower your FICO score, applying for credit just to get a look at your score isn't a move I'd recommend.
Good luck!
-- Jeremy
See related: New Fed, FTC rules mean more free credit scores for consumers, Consumers lose access to major credit score, How your FICO credit score is calculated: Payment history, How a FICO credit score is calculated: How much you owe, How your FICO credit score is calculated: Length of credit history, How your FICO credit score is calculated: New credit, The FICO 5: Breaking down the elements of the FICO score
Jeremy M. Simon is a former CreditCards.com reporter who wrote about credit scoring, economic data, credit card crime and other issues. He is based in Austin, Texas. He is a graduate of Vassar College and has previously worked for Thomson Financial in New York City, where he wrote about the stock markets, and Texas Monthly, as well as several publications in Austin.
Send your question to The Credit Score Report.
Updated: August 30, 2011
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