Understanding Free Credit Score Services

In an effort to monitor your credit progress, you may have signed up with one or more free credit score services, such as Credit Karma. But then you applied for a credit card or car loan and realized your free score was different from your FICO score. What gives?

That free score might have come from VantageScore, FICO’s biggest competitor. It used to be that free scores mainly came from VantageScore. But lately access to free scores is booming, and consumers now have ways to avoid paying for a FICO score.

VantageScore has the same 300-850 range as FICO and considers much of the same information, but its calculations vary a bit. For instance, VantageScore puts more emphasis on the last 24 months of your credit report than does the FICO. This puts people with a shorter credit history on a more equal playing field with those who have long credit histories.

In general, though, if you have a high FICO score, you’re likely to also have a high VantageScore. And all credit scores are built on data from one or more of the three major credit bureaus, TransUnion, Experian and Equifax.

Keep in mind that you actually have many credit scores, even within the VantageScore and FICO scoring systems. They vary by which credit bureau provided the data, the type of credit being applied for and when the score was requested.

Where to get a free FICO score

Several credit cards offer free FICO scores to their customers.

Discover, going further, recently started offering free FICO scores to everyone, not just customers. The FICO score given by Discover is a base score derived from data from Experian.

Where to get a free VantageScore 3.0

Like Discover, Capital One has begun to offer scores to anyone, not just its customers. Capital One will give you a TransUnion VantageScore 3.0.

Some personal finance websites also offer VantageScores and/or their own score based on them. You can get a free score from:

• Credit Karma: Scores from Equifax and TransUnion, updated weekly. Credit Karma’s ad-based model lets it offer subscribers other free services, including tools for credit monitoring, account monitoring and credit score advice.
• Credit Sesame: Score from TransUnion, updated monthly. Additional free services include credit monitoring and alerts, credit and loan analysis, and information about market rates.
• Credit.com: Score from Experian, updated every two weeks, and a second score based on Experian data. It also offers a “credit report card” and personalized advice for building or maintaining your score.
• Quizzle: Score from TransUnion, updated every three months. You can use scores to make an educated guess at whether you’ll qualify for loans or get product recommendations by identifying why you are checking credit (protecting identity, buying a car and buying car insurance are examples). The site also has credit-builder tools.
• Mint: Offers a score based on data from Equifax, updated every three months. It also has services including account monitoring, budgeting tools and more.

Monitoring your score, avoiding costs

Whichever score you choose to monitor, it’s smart to use the same version from the same credit bureau month after month. Looking at different scores each time isn’t very useful and can be frustrating. But watching one score over time can give you a good idea of where you stand and whether you’re progressing toward your goal.

Almost all the free sites also include paid products and may try to entice you to purchase those rather than stick with the free product you originally intended to use. In most cases, experts advise against signing up. It’s often smarter to decide what specific services you want to buy and then shop for them rather than simply opt into offers that pop up after you get a free score.

Bev O’Shea is a staff writer at NerdWallet, a personal finance website. Email: boshea@nerdwallet.com. Twitter: @BeverlyOShea.

Erin El Issa is a staff writer covering personal finance for NerdWallet. Follow her on Twitter @Erin_Lindsay17 and on Google+.

This article was updated July 15, 2016. It was originally published June 5, 2015.

from NerdWallet
https://www.nerdwallet.com/blog/finance/understanding-free-credit-score-services/