There are so many offers for free credit scores. You see them everywhere: on TV, in magazines and just about every website you look at. Of course, each ad will try to convince you that they have the best way to check your credit score. But which one can you trust? Will it really be free? Is there a catch? These are the obvious questions. But the most important question is not so obvious. It’s a question many people don’t even think about asking. The question is: Which credit score are they offering?
Your credit score is based on the information in your credit report. Each item in your report is given a numerical value, and that value is either added to your score if it’s a positive item, or subtracted if it’s a negative item. The companies that sell credit scores (or offer them for “free”) can use different formulas to determine your score. Each of the formulas may assign a different value for the same item on your report, so obviously they will come up with different scores. To make matters worse, some of the formulas that are used are based on different scales. That means a score of 740 from one formula might be considered a good score, but 740 might only be a fair score from another.
One of the scores is much more meaningful than the others. Approximately 90% of all lenders look at FICO scores when they are evaluating applications for credit cards, loans and mortgages. When you look at your FICO score, you see what lender will most likely see. A FICO score is determined by a formula that is only used by FICO (formerly the Fair Isaac Corporation). Companies that do not have access to the FICO formula have created their own formulas as a way to compete with FICO. These other formulas can only give you an estimation of your FICO score.
These other scoring methods can be quite accurate. There’s a chance that you might even get your exact score, but you won’t know for sure. If your score is off by just one number, it could make a difference in the interest you pay or it could even mean the difference between getting approved and being denied. For example; let’s say you got a 740 from one of these estimated scores. You go to a lender for a loan or a mortgage and they say that 740 and above will be approved, so you go ahead and apply. They check your FICO score and it is 739 so you are denied. If you had known it was only 739, you might have been able to do something about it. Even waiting a month or two could have raised your score by one point.
How can you tell which credit score you will get when you respond to one of the offers? The offer will state which scoring method they use either at the bottom of the offer page or buried in the fine print of their “terms and conditions”. CreditScore.com and FreeCreditScore.com say the score they give is “Calculated on the PLUS Score model… and is not the score used by lenders”. FreeScoresOnline.com states that “any credit scores provided to you… are not FICO scores”. I could go on and on with these disclaimers, but you get the idea. They are not giving you your FICO score. They are not offering the same score that lenders look at, so why waste your time and possibly some money getting the wrong score?
The best way to check your credit score is to get it directly from the source for FICO scores. Go to myfico.com. They offer a 10-day free trial of their Score Watch service. With this trial, you will get your FICO score along with your Equifax credit report. Just be sure to cancel within the ten days or you will be committed to a 3-month service for $14.95 per month. Another choice they have is a one-time charge of $19.95 which gets you instant access to your FICO score, TransUnion credit report and Equifax credit report.
I am not trying to sell FICO services. I am not employed by them and I receive no compensation for recommending their services. I don’t like their apparent monopoly on credit scores any more than you do. But until something better comes along, FICO is the best way to check your credit score.