Free credit scores are fast becoming the norm

May 24, 2016

Five years ago, consumers who wanted to know their credit score — a number that could mean the difference between a high or low interest rate, or whether applicants secure a loan at all — typically paid for it. Today, free access to credit scores is becoming the norm, with many card issuers providing it to at least some customers.

Discover, Wells Fargo and Capital One are among card issuers who offer consumers a free glimpse of the calculations that help determine how big a lending risk they might be.

The pressure to make scores free and more accessible is coming from consumer watchdogs, credit monitors and card issuers themselves. “Issuers that don’t offer free scores can find themselves at a competitive disadvantage,” says Matt Schulz, senior industry analyst at CreditCards.com, noting that consumers might expect to not have to pay.

Friday, Discover unveiled a tool to allow anyone to view their FICO credit score for free, whether or not they are Discover customers. It says it is the first credit card company to offer FICO information — a factor in more than 90% of consumer lending decisions in the U.S. — at no cost to the general public. But several other card issuers are expanding free access to credit scores.

Only a few years ago, consumers had to go to sites like Credit Karma and WalletHub to see, and not pay for, their credit scores.

But in November 2013, FICO launched its Open Access program, which enables all lenders who are FICO customers, including student loan companies, auto lenders and card issuers, to share scores with customers, along with the two most critical factors affecting that number. Experian, one of the three national credit-reporting agencies, took a similar step the next year, allowing lenders to share the VantageScore and other credit scores.

In February 2014, the Consumer Financial Protection Bureau weighed in, asking the nation’s biggest card companies to provide free access to credit scores along with other relevant financial information.

Those scores can be a critical entry point to Americans scanning their more detailed credit reports.

Fewer than one in five U.S. consumers do so in a year, according to the CFPB, but it’s a task that’s necessary to detect mistakes or spot instances of identity theft. Americans can get a free credit report annually from each of the three credit reporting bureaus: Equifax, Experian and TransUnion.

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