In light of the fact that I recently wrote about FICO scores – and their step-sibling FAKO scores – when I saw this post this week by Abby Hayes on Dough Roller about various ways to get your credit score at no cost, I couldn’t help but to share it with you. Please let me know your experiences with getting your scores. Good, bad, otherwise?
If you’ve recently tried to pull your own credit score, you know that it can get expensive. On the myFICO.com website, copies of your FICO score can cost anywhere from $19.95 to $54.85, depending on whether or not you want to see separate scores from all three major credit bureaus.
Since FICO is the score most lenders use to assess creditworthiness, this is the score you should be most concerned with when checking your own credit. But those high costs can certainly be prohibitive. But this is all about to change. Recently, FICO announced an innovative new program that will get free FICO scores to 25 million Americans within a year.
The FICO Score Open Access Program
In an effort to better serve and educate customers, FICO is inviting lenders to participate in its Open Access Program. Currently, Barclaycard US and First Bankcard – the credit division of the First National Bank of Omaha – are participating in the program. But FICO hopes to get many more lenders signed on quickly.
The Open Access program works by giving consumers a completely free copy of the credit report pulled by participating lenders. So right now, if you apply for a Barclaycard in the United States, you can get a free copy of the FICO score and report that Barclaycard uses to assess your creditworthiness – whether they ultimately approve your application or not.
In the past, you could get limited access to your credit score if a lender turned you down for credit because of information in your credit file. But these reports sent by lenders contain minimal information. The Open Access program is different because it includes not only your FICO score, but also the top factors that affect your score, along with steps you can take to boost your score.
Joe Krakoviak, our press contact with FICO, says, “This increased transparency and easy availability of the version [of consumers’ credit scores] most often used in credit decisions should further empower consumers with a better understanding of their credit.”
More Good News for Credit Aficionados
Even if you’ve got great credit and check your credit report and score frequently , the FICO Open Access program spells good news for you, too. According to a 2012 report by the Consumer Financial Protection Bureau, the credit score you get when you pull your own report might be significantly different than the score your lender sees.
The CFPB notes that most of the time, credit reports sold to consumers are generated from a slightly different model than those used by lenders. In a study of 200,000 credit files, the CFPB found that in “a substantial minority, different scoring models gave meaningfully different results.”
About 73-80% of the time, different scoring models put consumers in the same credit-quality bracket. Nineteen to 24 percent of the time, however, a different scoring model would place a consumer in one category above or below their original category. A small minority – 1-2% of consumers – would be placed in a category two or more removed from their original placement.
In plain language, this all means that you shouldn’t necessarily assume that you’ll be approved for credit if the credit score you buy looks excellent. Through FICO’s Open Access program, you’ll be able to see the actual score that potential lenders use.
FICO’s Open Access program certainly won’t solve all your credit problems, but it can give you more insight into what creditors actually see when they look at your credit file. Of course, you can only get your Open Access report from participating lenders, which will hopefully include more than just Barclaycard and First Bankcard.
For now, there are several ways to get a glimpse of your credit score for free, even if the scores aren’t exactly what creditors will see. But be on the lookout for lenders who participate in FICO’s Open Access program.
Finally, you can get your FICO score based on data from Equifax without charge if you sign up for a free 10-day trial of myFICO’s Score Watch.