Want to get your credit score for free?
No, it’s not a scam. Starting this month, San Jose, Calif.-based FICO, the first U.S. credit scoring company, is rolling out a program that allows consumers access to their credit scores for free, as long as their lender is on board.
So far only two lenders in the U.S. — Barclaycard and First Bankcard — have signed on. But FICO is in talks with many more banks and lenders to offer this program to consumers.
Under FICO’s Score Open Access program, customers are able to see their credit scores as often as their lenders order them from FICO, which could be every month, said Anthony Sprauve, a spokesman for FICO.
Customers can also see the top two factors affecting their score — things like late payments, a short credit history or high balances — and get information to help them better understand their score and what impacts it.
Lenders will determine exactly what format they use to grant customers access. They may send out e-mails or letters or include the score with their credit card or banking statements. They can also provide access through the customer’s online account, Sprauve said.
FICO credit scores, particularly the exact score that a customer’s lender is using, have typically been difficult for consumers to find.
“We are trying very hard to remove the mystery about the FICO score and the perception that the score is handed down from on high and educate people about their score so they understand the factors that drive the score,” Sprauve said.
While consumers can get a free credit report once a year from annualcreditreport.com, credit scores have come at an additional cost. Consumers have to order them directly from publicly-traded FICO or the three credit reporting agencies, Equifax, Experian and TransUnion. The fee runs about $9 for just one score. (Full disclosure: I also serve as the managing editor of the Equifax Finance Blog.)
“There’s so much confusion in the marketplace,” Sprauve said. “(Consumers) may understand the concept but there’s so many different scores out there, they’re not sure which one they should pay attention to.”
That’s if, in fact, they even know their credit score, or what it is: 56 percent of Americans don’t have a clue what their credit score is, according to an American Banker Association Survey.
Paul Wilmore, general manager of Consumer Markets at Barclaycard, said in a release that by offering customers access to the same FICO score most lenders across the country use, it will give customers a clear picture of their creditworthiness.
That’s something consumer advocates and even members of Congress have been calling for lately. Two bills were introduced in the Senate and House earlier this year that would require consumers to have once-a-year free access to their credit scores — similar to what is now available for credit reports — creating more transparency in the credit reporting industry.
The legislation also aims to ensure that credit scores are accurate and crack down on deceptive marketing practices that lure consumers into unknowingly buying credit products: Think of the sites that offer to give you a “free” or $1 credit score and then automatically enroll you in an expensive credit monitoring service. Other sites turn around and sell your information to other creditors.
“The spirit of the legislation we absolutely support,” Sprauve said. “Consumers should be able to see their scores on a regular basis, but the most efficient way to do that is not through the government, but the existing relationships consumers have with their lenders.”
Sprauve added that this legislation would provide a static credit score, while FICO is providing more constant access to scores.
The folks at FICO believe 25 million consumers will have free access to their credit scores by the end of the year.
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