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Free credit scores: Where do these credit scores come from?

Dahna ChandlerThe Mortgage Reports Contributor

Credit scores for free: Where do you get them?

There are several sources of free credit scores:

  1. Credit sites that offer a free Vantage score are numerous. Just avoid providing a credit card number, and understand that the Vantage score is not the one most lenders actually use in credit decisions
  2. Credit monitoring services often lure you in with the promise of free credit scores. But they require a credit card number, and it can be hard to opt out of the service once you have your scores
  3. Apply for credit. Some cards promise a free credit score if you apply. If you want the card anyway, that’s a good bonus, as long as you get a FICO score, which is what most lenders actually use

Note that the government site www.annualcreditreport.com provides your credit reports from all three bureaus (you request each one separately), but you have to purchase your scores or provide credit card information to sign up for credit monitoring or other services. The score offers are no better just because the site is government-sponsored.

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Determining Vantage and FICO scores

So, where do you go when you want completely free credit scores you can check regularly, especially as you build or restore your credit? What’s the difference between these score types?

Consumers get geeked out when they realize they can get their credit scores free, downloading multiple apps to check theirs regularly. That’s because they seemed “top secret” at one time, only available to creditors evaluating you for credit products.

What is a good FICO score?

Now multiple sites offer them free from all three major credit reporting agencies, Equifax, Experian, and Transunion. Many update daily, giving you an instant high (or low) when you check yours. Experian offers its credit scores from limited sources, like credit card carriers or their free credit score site. But, Equifax and Transunion offer theirs more widely.

You have multiple credit scores

What scores you get depend on the source of the score. If you’re like most people, you probably didn’t know you have both a FICO and Vantage score at all three credit reporting agencies.

Launched in 2006 to compete with FICO, Vantage is a collaboration between the three major credit reporting agencies, Equifax, Experian and TransUnion. Using a different scoring model from FICO, it allows consumers who can’t get scored by FICO because of limited credit to have this alternative score.

Catch 22: You need credit to get credit

Both score types can vary based on the agency’s scoring model and what’s in your credit report with that agency. Your Vantage score might be higher or lower than your FICO score at each agency.

There’s a major difference between FICO and Vantange is the source of the data for your scores. is Equifax, Experian or TransUnion are credit reporting agencies that collect your credit history data to report to others and to create credit scores.

FICO isn’t a credit reporting agency. It grabs data from all three agencies to develop its score based on statistics and calculations.

Both scores range between 300 to 850. But, FICO and other scores for particular industries have a wider scale, and you won’t see those until you apply for a car loan or mortgage.

Not all free credit scores created equal

While it appears that both scoring models use the same criteria to generate credit scores, they have different purposes, and lenders don’t use them the same ways. That can make getting and using free credit scores to apply for credit tricky.

Because they’re all vying for the most subscribers, all free credit scores provide limited but useful information from your credit reports about what’s affecting your credit score. But what are these scores telling you and are they the ones most creditors use?

Not really, It’s an industry joke that these credit scores are “FAKO,” not FICO.

Solve these 3 problems and improve your FICO score fast

Some lenders use Vantage scores to determine your credit risk before offering you credit. But Vantage scores are educational scores. They help you track factors and trends over time in your credit history that influence all three of your scores.

It’s FICO that 90 percent of lenders use to decide whether they’ll offer you credit. Most consumers don’t know that.

After numerous consumer complaints, the Consumer Financial Protection Bureau acted to make getting credit scores and using them easier and less shady for consumers. The agency wants consumers to know their options for getting free access to their credit scores and understand what scores determine your creditworthiness.

Scoring cash with subscribers

These two scoring models are competing businesses, and they want to get as many subscribers as possible to achieve or maintain market dominance. The providers of Vantage scores wanted to get users checking their scores nearly daily.

They achieved this by deceiving consumers into believing Vantage scores get used as often as FICO. They encourage you to believe your Vantage score helped them pre-select credit cards or loans you might get approved for. Often, those credit products are out of reach for you if creditors pull your FICO score.

What credit score do you need for a mortgage?

You apply and the credit card company does a real credit check. That results in a “credit inquiry” — a notification to a credit bureau that you’re applying for credit.

A credit inquiry lowers your score by a few points. But, after believing your Vantage score qualified you for this credit, you formally apply for credit and get denied. Why?

Most lenders use your FICO score to determine your eligibility for credit, not Vantage. When they pull your credit report, it’s for a FICO score, and the two scores are rarely the same. Sometimes, they’re considerably different from your Vantage scores.

That’s why it’s best to use the Vantage scores to gauge your potential creditworthiness. But don’t rely entirely on them to apply.

Is there a truly free credit score?

Avoid being like the many consumers who learn too late that the answer to that question is no. Don’t get enticed by promises of better credit scores and use your credit card for a credit monitoring service.

You’ll discover fast these scores aren’t better or different from the ones that come free with apps or websites. Then, if you fail to cancel your trial before the trial period runs out, the monthly fees start. Trying to cancel once that starts is more difficult than before the trial ends.

The effect of a 680 credit score on your mortgage

If you don’t need credit monitoring because of identity theft, you can get your free credit report by going to a nonprofit consumer credit counseling agency if you use their services. Some banks provide them to account holders, and some credit card issuers offer them as well.

These are most beneficial if you want the accounts associated with the free credit scores. Even then, it’s important to make sure you’re getting the credit score most lenders use: FICO.

Where to get free FICO (not FAKO) scores

FICO does tell consumers who its partners are, and where they can get FICO scores through what they call Open Access.

According to MyFICO, “FICO works with over 130 financial institutions to give their customers absolutely free access to the same FICO® Scores they are using to manage credit accounts.

“If your bank, credit card issuer, auto lender or mortgage servicer participates in FICO® Score Open Access, you can see your FICO® Scores, along with the top factors affecting your scores, for free.”

The old adage “you get what you pay for” isn’t necessarily true with your FICO scores.

Verify your new rate (Sep 24th, 2018)