Can you get a real credit score for free? The answer is yes, no, maybe, and well… sort of. If you don’t like that answer, let’s jump right in with some specifics that will make it clear whether or not you can really get real credit scores for free.
Real Free FICO Credit Scores
One of the issues with free credit scores is the idea of what a real, true, or legitimate credit score is. Technically, there is no such thing as a real credit score or true credit score. This isn’t physics. All credit scores are mathematical models of the information on your credit report. This produces a number that lenders can use in a statistical model to determine the approximate default rate of borrowers. In a way, it is similar to the mortality rates life insurers use to price life insurance. It doesn’t matter if it is right or wrong for a single person, as long as the overall pool of insured (or borrowers in this case) behaves as predicted.
Theory aside, in the real world the vast majority of lenders use the FICO credit score by Fair Issac when they make lending decisions. Different lenders use different credit reports, and some pull scores based on more than one credit report, but almost all lenders use the FICO score when they decide whether or not to approve that new rewards credit card, a second mortgage, or car loan. They use the same FICO score to determine the interest rate they will offer you. So, when people talk about a real credit score, they mean a FICO credit score.
Unfortunately, it is not that easy. As you can imagine, people treat different kinds of credit differently. People tend to default on credit cards first, then car loans, and lastly mortgages, for example. For that reason, Fair Issac offers more than one credit score. Some are tailored to auto loans, some are tailored to mortgages, and so on. Then, for each type of FICO score, it can be calculated from any of your three different credit reports. So, even if you have an actual credit score from Fair Issac, that doesn’t mean you have the true credit score that your lender is using.
No matter what score your lender uses, FICO doesn’t come free. FICO charges for credit scores. They charge lenders, they charge banks, they charge you, if you use their myFICO service. This isn’t a non-profit think tank.
Fake Free Credit Scores
All of this brings us to the concept of fake credit scores, or as finance snobs like to call them FAKO credit scores.
In fairness, none of these scores is fake, per se. They are calculated in a similar manner to a FICO score. The only thing that makes a FICO score more real is that a lender is more likely to actually be using it. A more nuanced terminology might call these alternative credit scores.
There are several kinds of alternative credit scores. These can come for free, depending on who is using them. For example, one alternative credit score, called the VantageScore is owned and calculated by the three major credit bureaus, so anyone affiliated with them can use those scores for free. This is where CreditKarma gets its free credit scores from, for example. In fact, virtually all of the online free credit score services out there from Credit Sesame to Credit Karma to Quizzle and beyond, use alternative credit scores when they give you a free score online.
Can You Actually Get Free Credit Score?
Which brings us to the million dollar question. Can you actually get a real free credit score anywhere?
The answer is yes, you can.
Some banks and credit unions, as well as credit card companies, offer to let you see your credit score for free. A certain Discover Card offers free FICO credit scores on your monthly statements.
If these companies aren’t getting free credit scores, then how can they offer them to you for free when places like Credit Karma don’t use real FICO scores?
The answer in all of these cases is that these companies are already getting your credit reports for their own purposes. They are just passing the information on to you.
Most financial institutions regularly pull credit reports on their customers. Your credit card company, for example, wants to know if your credit score is plunging, or rising, before deciding to send you that mailer offering a great new benefit and higher credit limit. Likewise, your bank or credit union doesn’t want to waste money advertising a new home equity line to people with a 420 credit score. So, every so often, they pull your report. Yes, it costs them money, but they are already making money providing your financial services. An extra credit score pull is just the cost of doing business.
Compare this to the online free credit score companies. They make no money off you unless you buy something through them or click on an ad. That kind of revenue isn’t enough to constantly pay for new FICO credit scores for everyone.
Remember, the point of seeing your credit score isn’t so much to know your exact number, it changes daily. The point is to ensure that it isn’t going up or down in ways that you don’t expect. By following along with your credit score, whether it is from a true FICO score or an alternative credit score, you can tell when that high balance on your Target Red Card is hurting you, or that getting a new Fidelity Card doesn’t have any effect because you chose the debit card. After all, there isn’t really anything you can do to your credit score other than improve it by paying everything on time all the time. Everything else, from how many credit cards you have, to how many people have pulled your credit report recently has a smaller affect than your payment history, and those effects get smaller with time.
Use your credit score reporting, however you get it, to keep an eye on your report, not to obsess over the current number, and you’ll be fine.