As you already know, we work with people all over the United States, teaching them to get better credit scores through credit education. One of the most common questions we get is “How do I get a free credit score?”. 

Well, there really isn’t much in the way of free credit scores.  When you apply for a home loan, you are entitled to your Score Disclosure page with the scores the lender used per the Fair Credit Reporting Act (FCRA), Section 609(g)(1)(D).  Now, some mortgage lenders do charge the consumer for the credit report, so you end up paying for the scores. 

And your credit takes a hit with a Hard Inquiry due to the loan application and credit check.  The good news is that most lenders in the U.S. use FICO scores in their lending decisions, so the scores you get a copy of will be your actual FICO scores, not some consumer credit scores.

NOTE: You can read more about different types of credit scores in our January 21st article and also in this great article from Stephen Snyder following Experian’s decision to stop consumer access to their FICO scores.  Remember, unless you’re looking at FICO scores, you probably do not have an apples-to-apples comparison as to what your lender will see.

Some “free” scores are offered to people who sign up for credit monitoring services or go to one of the many websites offering “free credit reports” and end up signing up for services that involve monthly billing to their credit card.  Sometimes banks and credit card companies offer their customers access to their credit scores.  The main thing to note on these offers is that they are probably not actually FREE as you are paying for some other services, and they are most likely NOT actual FICO scores, they are usually consumer credit scores.

It is important to note that non-FICO scores can be helpful to track your general credit rating trend.  Chances are that if you watch any consumer credit score consistently over a period of time and you see it going up, it’s a good indicator that your credit rating has improved and your FICO score has likely gone up, too.  On the other hand, if your consumer score is trending downward over a period of time, you’ll probably find that your FICO scores are lower than before.  Just remember that your consumer credit scores are not likely to be the same scores that will be used to determine your eligibility for a loan.

Having said all that, we wanted to tell you about a site that offers free credit scores to consumers.  At Credit Karma, you can sign up for free membership and get your credit score ‘anytime you want’, according to their home page.  This is made possible through “Karma Offers” that are made to all of their subscribers.  A recent sampling of companies making these offers included auto insurance, cell phone service, credit cards and tax preparation.

After I scoured the site for the tell-tale information of who actually owns it, I found no proof that it is from one of the three major credit bureaus.  I also found no proof that it isn’t.  However, I could not locate information that specified if the free score was a FICO score or not, so I emailed their help@ service.  Their reply came quickly and this is an excerpt from it, dated 02.26.09:

At the current time, we only pull credit scores from TransUnion.
The score is not your FICO score.

So, there you are.  A site offering consumers a non-FICO credit score based on their TransUnion report, all free just for reviewing and rating offers from a multitude of companies.  For the sake of research, we’ll try it and compare it to the FICO scores over a period of time.  Your comments and experiences with Credit Karma are welcome to help us get a broader picture of this company’s service and its usefulness to consumers.

FINAL THOUGHTS
Becoming credit wise, educating yourself on your own credit and financial matters, can be very empowering and have a positive impact on your Personal Financial Fitness.  Monitoring your own credit, at minimum cost, is a good thing, and it makes sense to utilize all resources possible.