Free credit scores, the real ones that lenders use to keep tabs on you, are on the way to millions of U.S. credit card users.
FICO, the owner of the most-used score, has launched a free score program that allows lenders who already buy the score to share the important three-digit number with you at no extra cost. Barclaycard and First Bankcard have announced plans to provide the free scores, and other, as-yet-unnamed card issuers are not far behind, FICO says.
“We’re super optimistic that scores will be available to millions of consumers by the end of the year,” FICO spokesman Anthony Sprauve said. Lenders can provide your score as often as they buy it from FICO, Sprauve said, which is monthly for most card issuers. “There’s no price barrier.”
Barclaycard US cardholders, for example, can see their score by logging onto their account and accepting terms and conditions,said James Saltysiak, director of value added services.The company usually updates the score every 60 days — but if there is a change, Barclays will update the score and email the customer with an alert.
“The whole purpose is for people to be aware of their financial health,” spokeswoman Nicole Dye-Anderson said. Currently there is not a way to access the score without a web connection to the online account, but that could change down the road.
FICO’s move to expand credit score access is a step forward for consumers, but not a panacea, advocates said. The U.S. Public Interest Research Group argues that scores should be available to everyone — not just to people whose lenders decide to share it with them.
“Over time, various laws and now this action have somewhat increased access to free scores,” director of consumer programs Ed Mierzwinski said in an email interview. “But, credit scores should be available to all consumers whenever they obtain a credit report, for free, or after adverse action or otherwise.”
Not all consumers have a credit card or other loan that would provide
them access to their score under FICO’s program. Yet landlords,
employers and other noncreditors are evaluating people on the basis of
Citing the importance of the three-digit score in people’s financial lives, consumer advocates are pushing Congress for legislation requiring that credit scores be provided for free, as credit reports are now. Under a provision of the Fair Credit Reporting Act, you are entitled to a once-a-year look at your credit report from the three major credit bureaus. And if you are denied a loan on the basis of your score, the Dodd-Frank Act requires the lender to share the offending digits with you.
Currently you can buy a look at your score from various providers, with myFICO offering a $14.95 monthly “score watch” service or one-time access for $19.95 per credit bureau. The score is computed from the history of loan repayments kept by the credit bureaus.
FICO’s move comes as competing scores, such as the Vantage Score developed by the big credit bureaus, take aim at the market for measures of consumer lending risk. FICO scores are in a range between 300 and 850, while Vantage scores go from 501 to 990. FICO said it plans to make the score available to a significant portion of the 200 million consumers who have a credit score, helping to cement the company’s brand position.
While it may not be the last word, FICO’s initiative promises to greatly expand the availability of free scores. FICO, formerly Fair Isaac Corp., says that any U.S. lender that now buys the score to monitor customers will be able to share the digits, and observers predict that competing lenders will not hesitate to jump in.
In addition to the score itself, lenders can share the top two factors influencing your score. The factors will be plain-language tips, such as missed payments or balances being too high.
“They get actionable information they can use,” Sprauve said.