By Amy Cao | Manager of Service Delivery | The Financial Clinic
If you’re a banked consumer who has at least one credit card or you’ve ever taken out a loan, you already have a credit score. However, what that score is, what it means, and how you got there, is not always clear.
Free credit scores are a fairly new phenomenon. Until recently, consumers only had ready access to annual credit reports, and fewer than one in five Americans actually accessed their free credit reports in any given year. To make credit information more commonly available, the Consumer Financial Protection Bureau (CFPB) launched a credit score initiative in 2014, which urged banks and credit issuers to provide credit scores directly and freely to consumers.
“Credit reports and scores can determine the terms of people’s mortgages, whether they qualify for auto loans, or if they are eligible for different credit cards,” said Former Director of the CFPB, and current Democratic Nominee for Governor of Ohio, Richard Cordray. “Making consumers’ credit scores freely available on their monthly statement or online makes it easier for them to spot problems with their credit report.”
Today many major banks, financial institutions, and other personal finance companies provide access to free credit scores for consumers. Each of these offers a version of your credit score by one or more of the three major credit bureaus, and there are a few key questions to consider.
Are there hidden costs?
For the sites listed below and most others, your credit score is available for free. However, beware that sites also offer add-ons or other fee-based packages for services like more frequent reports or additional security monitoring. Whether the extras are worth it is up to you, but you may want to check out some other sites before committing to a monthly subscription. You could very well find it for free!
As with other free services, even if no money is exchanged, your personal information is. Free credit report platforms typically require that you create an account with demographic and contact information, which may be targeted for marketing. Some sites will ask for your full or partial SSN, and continued access to your credit history. If you’re able to, you may want to poke around first to see what is collected, how your personal information is being used, and who has access to it.
Rest assured that most credit score sites use your data in order to analyze it for you and provide suggestions on how to improve. They’ll also offer some useful educational tools. Most will use encryption to secure your data. But not all are necessarily the same.
What type of score is it?
FICO is the most popular scoring method used by lenders in the US. For over 25 years, FICO scores have been the industry standard for consumer risk assessment for the US lending industry. Generated by the Fair Isaac Corporation (FICO), the scoring model has evolved with lending patterns and consumer trends. There are currently nine base FICO Scores, as well as industry-specific auto and bankcard versions.
The three major credit bureaus — Equifax, Experian, and TransUnion — generate their own proprietary scores based on the data they collect. Scores like the Experian National Equivalency Score or the TransUnion Interactive Score are not commonly used.
To offer more consistency between the bureaus, and for a more cost-effective alternative to the FICO algorithm, VantageScore was created. Jointly produced by Equifax, Experian, and TransUnion in 2006, the VantageScore model includes 24 months of past credit activity on utility bills or rent, which could bulk up someone’s credit file who would otherwise have “thin” files according to FICO. Currently, VantageScore has three scoring models.
The most recent version, VantageScore 3.0, is the credit score you’ll most often see offered for free.
Here’s a side-by-side comparison of how the two scoring models are calculated:
Which is the score that lenders use?
If you already use free credit scoring tools, you might have noticed different scores across different platforms. This is because there are different versions of each type of score used for different types of credit. For example, the FICO formula is largely the same but FICO Auto Scores focus slightly more on utilization and payment trends in your history. The consistency of your monthly payments and your current debt balances are more pertinent to auto lenders when assessing how you might handle monthly car payments.
Lenders generally favor the FICO, particularly FICO Score 8, which is available for free. Less common scores like the FICO 2 or FICO 5 come at a cost, so if you’re really curious, you can purchase it at myFICO for a fee.
Although VantageScore is FICO’s biggest credit score competitor, it is not widely used by creditors. However, the scoring models are largely based on the same information, so monitoring your credit via your free VantageScore 3.0 is perfectly acceptable. Some sites show your full report with the score, or come with other analysis tools, so that you can see what’s impacting your score and how to improve.
|Type of Credit||Type of Score|
|Credit Cards||FICO Bankcard Scores, FICO Score 8, and FICO Score 3|
|Mortgage Loans & Refinancing||FICO Scores 2, 4, and 5|
|Auto Loans||FICO Auto Scores 2, 4, 5, 8 and 9|
|Personal Loans and Student Loans||FICO Score 8|
|Retail Credit||FICO Score 8|
|Credit Score Monitoring||All FICO and Vantage Scores|
Where can I access my score?
No matter which free service you choose, the impact to your credit is the same — none! Credit “check-ups” that are not directly linked to an application for credit are considered soft inquiries (or “soft pulls”) so don’t fret!
Banks and Credit Cards that Offer Free Credit Scores
|Financial Institution||Score Type||Data Source|
|1st United Credit Union||FICO Bankcard Score 2||Experian|
|American Express||FICO Score 8||Experian|
|Bank of America||FICO Score 8||TransUnion|
|Barclaycard||FICO Score 8||TransUnion|
|Chase||FICO Score 8||TransUnion and|
|Citi||FICO Bankcard Score 8||Equifax|
|Commerce Bank||FICO Score 9|
FICO Bankcard Score 8
|Digital Credit Union (DCU)||FICO Score 5||Equifax|
|Discover||FICO Score 8||Experian|
|First Commonwealth||FICO Score 9||Experian|
|First National Bank of Omaha||FICO Bankcard Score 8||Experian|
|First Premier Bank||FICO Bankcard Score 4||TransUnion|
|HSBC||FICO NextGen Score||Equifax|
|Synchrony||FICO Score 8||TransUnion|
|Walmart||FICO Score 8||TransUnion|
|Wells Fargo||FICO Bankcard Score 2|
FICO Score 9
Other ways to see your credit score
|Website||Score Type||Data Source|
|CreditCards.com by Bankrate||VantageScore 3.0||TransUnion|
|Credit Journey by Chase||VantageScore 3.0||TransUnion|
|Credit Karma||VantageScore 3.0||Equifax and TransUnion|
|Credit Scorecard by Discover||FICO 8||Experian|
|Credit Sesame||VantageScore 3.0||TransUnion|
|CreditWise by Capital One||VantageScore 3.0||TransUnion|
|CreditWorks Basic by Experian||FICO 8||Experian|
|Mint by Intuit||VantageScore 3.0||Equifax|
|Quizzle by Bankrate||VantageScore 3.0||TransUnion|
If you apply and are denied for credit, you should receive an adverse action notice that lists your credit score and one or two contributing factors. The credit score on your credit-based adverse action notice is free, and will also tell you how to get a free credit report within 60 days.
Additionally, you can always check with your financial coach or credit counselor!
What does my score indicate?
VantageScore 3.0 and FICO scores range from 300 to 850. Other industry-specific scores range from 250 to 900. Generally, the “Very Poor” to “Excellent” categories are good points of reference, but it’s best to think of credit on a spectrum.
That being said, take the following benchmarks lightly. Generally, scores above 650 are considered fair or good. Top notch credit cards and interest rates are typically unlocked at scores above 750. Focus more on what the score reveals rather than the number.
Beware of targeted ads
Some sites rely on partner affiliates, which means biased or targeted advertisement. These are not always the best fit for you, but you may find the suggestions useful if you are looking for credit. Just remember to do your own research elsewhere and compare notes before signing onto anything.
When you find a free credit score platform that works for you, check out the reporting and analysis tools available. With so many sites to choose from, you have many opportunities to shop around and compare.
Additional Resources, provided by Change Machine:
- Making Sense of Free Credit Score Platforms (Co-produced by Credit Builders Alliance and The Financial Clinic)
- 6 Questions to Ask When Evaluating Financial Products