Free Credit Scores: What's the Catch?

Consumers often check their credit scores for the first time when they’re about to apply for a loan or have been denied one. If you’re proactively checking your credit, it’s sometimes difficult to know where to start, because many websites and companies offer credit scores, some for purchase and others for free.

What’s the Best Choice?

Before choosing a credit score to look at, there are a few things to know. First, there are hundreds of scoring models out there, and while lenders use some of them, other scores exist for purely educational purposes. An educational score may be helpful if you use it to track the ups and downs of your credit score, but you should know that no lender is looking at that particular score when evaluating your credit application.

You also need to know your scores fluctuate, even when you haven’t made a drastic financial change. If you have 10 trade lines on your credit report — say, a few credit cards, student loans and a car loan — that probably means 10 different data furnishers are reporting information about your accounts to credit bureaus at different times. Your credit score is a snapshot of your credit report at the moment it’s pulled, meaning your score could change a few points if you buy it today, apply for a credit card tomorrow and buy the same score several days later.

Finally, not only will you not know which scoring model your potential lender will use in its application-approval process, you may not know a particular lender’s standards — the score one creditor considers great may not be good enough for approval by another lender.

Can You Really Get a Free Credit Score?

There are many ways to check your credit score for free. For example, when your credit application is denied, you are entitled to a free credit report and a free credit score, as well as an explanation from the lender about why you were rejected.

Outside of credit denial, you can request a free credit score through a few websites, and some credit card companies give you a credit score every month or quarter through the FICO Open Access program. With websites offering free credit scores, you’ll want to know if the score is educational or used by lenders — a free credit score is offered through Credit.com are lender scores — but either way, checking the same score regularly will help you identify behaviors that help and hurt your credit.

Don’t Get Carried Away

The most important thing to know about credit scores — whether you purchase them or access them for free — is you shouldn’t get obsessed with the numbers. You’ll never know all your scores, and because your credit reports change so often, vying for perfection isn’t a worthwhile use of your time. Focus on making loan payments on time, using very little of your available credit and applying for credit sparingly. Check your credit reports regularly to spot errors or fraudulent accounts (and address them promptly). If you maintain good, basic habits, you should have a decent credit standing, no matter which model a lender uses to make decisions.