FREE Credit Scores
Free is really free this time right?
I’m sure you’ve seen all the crafty commercials talking about how you can get your free credit score at ….. .com without having to submit any credit card information.
But what you may not know is the score you get is not your actual FICO® score, it’s an educational score or a credit score generated from a different scoring model other than FICO®’s.
One popular site, CreditKarma™ does offer free credit scores, but it’s not your FICO® scores. The scores you get are the TransRisk New Account Score, Vantage Score®, and Auto Insurance Risk Score from Transunion.
So where do all of these credit scores come from?
Let’s break this down.
The TransRisk score is calculated by TransUnion’s® proprietary scoring model while the VantageScore® is calculated by TransUnion® using the Vantage scoring model.
The Vantage Score® model was developed jointly by all three of the major consumer credit reporting agencies; Equifax, Transunion, and Experian. The Auto Insurance Score is calculated from data derived from a consumer’s credit report.
I’m sure your head is probably spinning right now with all of these scores, models, and credit jargon but stay with me.
Let’s face it, all of these free credit scores being offered are educational and serve a purpose but what truly matters is what lenders use; it’s your FICO® scores. The top 50 financial institutions and 25 largest credit card issuers and auto lenders here in the U.S use your FICO® scores.
Now don’t get me wrong, we need more proactive credit sites such as CreditKarma™ that believe in access to free credit scores without all the sneaky “free” trials or subscription requirements; that’s a good thing and something I fully support.
However, the problem lies in credit score accuracy and disclosure. Consumers like Abbie Steed found herself house hunting and needing a loan. She paid $30 to get her scores from freecreditreport.com only to find out from the lender that her FICO® credit score was nearly 100 points lower!
State Representative Paul Ray recently proposed a bill to clarify these credit score differences so consumers like Abbie, would not pay for one score and accept something different, or worse.
The bottom line is, the best way to get your FICO® score is going directly to the source that creates it; the myFICO™ website. myFICO™ is the consumer division of Fair Isaac, the company that actually invented the all too familiar FICO® score.
The myFICO™ site allows consumers to check all three of their FICO® Scores with its FICO® Standard product at $19.95/each. Now keep in mind this is your generic FICO® score which is the only score you can purchase as a consumer. There are other versions only available to lenders such as the FICO® Mortgage Score, the FICO® Bankcard Score, the FICO® Installment Loan Score, the FICO® Auto Score and so on.
While the FICO® scores you can purchase from myFICO™ as a consumer may not be identical to the FICO® scores a lender may view, it’s about as accurate as you can get.
With almost 60% of consumers in the United States having no idea what their FICO® credit score is – creating more accuracy and transparency in credit scoring is exactly what we need. It’s clearly why the Free FICO® Score Open Access Program has been gaining so much momentum lately.
Until next time.
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About the author
Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for Dun and Bradstreet Credibility Corp, the SBA.gov Community, and All Business.com. His articles and blog; Business Credit Blogger.com, have been featured in ‘Fox Small Business’,’American Express Small Business’, ‘Business Week’, ‘The Washington Post’, ‘The San Francisco Tribune’,‘Alltop’, and ‘Entrepreneur Connect’.
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