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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 , and , 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, and will pitch you targeted offers based on your credit profile. While 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 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 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., for example, delivers a score computed by TransUnion, with a range between 150 and 950, while 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, users can see how their credit compares against others. will assign letter grades to different components of your credit report, such as how well you pay your bills.

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