ShareThis Page
Business

Checking credit scores free comes with a catch

| Sunday, April 27, 2008

As concerns mount over identity theft and tightening credit standards, several Web sites now allow consumers to check their credit scores free of charge. But there's a catch.

The sites, including Credit.com , CreditKarma.com and Quizzle.com , have started offering free scores developed by the major credit bureaus, including TransUnion LLC and Experian Group Ltd. Credit scores look at data in a borrower's credit report, such as payment history and debt levels, and lenders use them heavily in deciding whether to lend money and what rate to charge.

Free credit scores are good news for consumers, who typically have to pay for credit scores separately or buy them as part of a credit-monitoring package.

So what's the catch• In exchange for a free score, Credit.com and CreditKarma.com will pitch you targeted offers based on your credit profile. While Quizzle.com doesn't show users targeted ads, it will recommend various mortgage options from its parent company, online mortgage lender Quicken Loans Inc. Additionally, consumers will have to be comfortable volunteering some basic information about themselves -- such as a birthdays, addresses or Social Security numbers -- to allow the sites to retrieve their credit report and scores.

The sites say they don't share your personal information with other companies. What's more, their credit pulls are "soft," meaning that requesting a score won't hurt your credit. (Although Credit.com temporarily stopped offering its service, dubbed "Credit Report Card," to make some updates, it plans to bring back the free scores and reports in a few weeks.)

But consumers should keep in mind that there are multiple variations of credit scores, so the scores they get may not be the same ones that a lender uses in its decision to grant credit. In addition to Fair Isaac Corp.'s widely used FICO score, for example, each of the credit bureaus sell multiple versions of their own proprietary scores to lenders. "If you have good credit, you're going to have a good score, regardless of which model you use," says John Ulzheimer, president of consumer education for Credit.com. Still, he says it's a good idea to ask your lender which score and credit bureau it uses.

The sites use credit scores computed by the credit bureaus. CreditKarma.com, for example, delivers a score computed by TransUnion, with a range between 150 and 950, while Quizzle.com uses an Experian-developed score ranging from 360 to 840.

Nevertheless, the free scores can provide users with a quick snapshot of where they stand. "It's like their temperature -- a quick read to say things are OK," says Jim Bruene, editor of Online Banking Report. "If you see your score fall dramatically, for example, you know you have a problem."

Meanwhile, the sites offer other tools. At CreditKarma.com, users can see how their credit compares against others. Credit.com will assign letter grades to different components of your credit report, such as how well you pay your bills.

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.

click me