Credit card companies offer free credit scores
NEW YORK — Want to check your credit score? It might be included on your next credit card statement.
The FICO score, which is widely used by lenders to gauge your financial health, should be checked before applying for a car loan or a mortgage. But it can cost as much as $20 to do so. Now, three credit card issuers — Discover, Barclaycard US and First Bankcard — have signed up to allow about 35 million cardholders to check their FICO scores every month at no cost. Besides those three credit card companies, more lenders are expected to sign up.
“I think it's fantastic,” said Ted Sarenski, a certified public accountant and financial planner at Blue Ocean Strategic Capital. “People should be watching that score and asking how they could improve it.”
The move is an initiative by Fair Isaac Corp., the company that developed the FICO score, to enable more people to see their score for free and get its brand in front of consumers. It occurs after websites such as Credit.com, CreditSesame.com and CreditKarma.com have offered free credit scores for years. Those scores are derived differently from FICO's, but offer a similar three-digit score.
The FICO score ranges from 300 to 850. The higher the score the better. People with higher scores are offered lower interest rates from lenders and credit card companies. Most lenders pay Fair Isaac to see the scores of potential borrowers when determining if they will approve an application. What has changed is that Fair Issac has agreed to let some lenders share the scores with customers. It's not charging the lenders more to do so.
Discover Financial Services, the nation's sixth-largest credit card issuer, is the biggest lender to sign up. Cardholders of its “Discover It” branded credit cards will see their FICO scores on their monthly statements. Discover will offer scores to all of its credit cards in the next few months. The score will be featured prominently at the top of statements and will be available on paper and online.
Barclaycard and First Bankcard customers will have to log on to the credit card's websites to view their credit scores. Barclaycard, the credit card unit of Barclays PLC, said that 80 percent of its 8 million cardholders will have access to their FICO scores by December. The company provides credit cards for retailers such as Barnes & Noble and airlines such as US Airways and Frontier. So far, 80,000 First Bankcard customers have access to their FICO scores. It will roll out to its 2.5 million cardholders over the next few months.
With a number of free credit scores available, it can get confusing for customers. “They're all going to be different,” said John Ulzheimer, a contributor at CreditSesame.com. But he says consumers shouldn't get worked up about the scores. Ulzheimer recommends focusing on your credit report, which lists the companies that have extended you credit, the types and amounts of the loans you have outstanding and your payment history.
Credit reports are available for free, from each of the three national credit reporting agencies -— Equifax, Experian and TransUnion — every 12 months from AnnualCreditReport.com. They should be checked every year for mistakes or possible identity fraud.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Google Maps opens business doors to online views for shoppers
- Utility regulator seeks $639,000 in penalties from electric supplier
- Many in Pennsylvania can still get benefit of Affordable Care Act
- Indian firm plans exports of ethane from U.S. shale fields
- Stocks shake off Fed’s talk of stepping up interest rate hike
- Few homeowners expected to benefit from Bank of America’s $16.65B settlement
- 5 apps that make you say ‘wow’
- In 10 years as public company, Google has reshaped IPO landscape, more
- EDMC to cut costs, roll out new grant
- United tries to woo fliers with upgraded food options
- North Shore company ActivAided’s specialty back brace racks up sales