Millions With Credit Problems Can Now Get Free Credit Scores

Millions of Americans working with nonprofit credit counselors will have free access to their FICO credit scores as part of a new agreement between FICO and the three major credit reporting agencies, Equifax, Experian and TransUnion. The Consumer Financial Protection Bureau announced the agreement in an April 21 blog post, saying that this change will allow counselors and their clients have more informative, productive conversations about how to improve clients’ credit standings.

For many consumers, finding a way out of debt and repairing damaged credit isn’t a journey they can confidently navigate alone. Seeking the help of a credit counselor can be an affordable, efficient way to make progress on such goals, because the counselor’s knowledge can empower the consumer to make positive changes. A big part of empowering these consumers is helping them understand their financial situation, but counselors previously have been prohibited from sharing with consumers the credit scores and credit reports they purchase on consumers’ behalf.

“This no-sharing policy is common in contracts signed by business users of credit reports and scores,” the CFPB blog post reads. “But when applied to consumer counseling, it limits a client’s ability to review the credit history provided by the counselor on their own and may make the consumer more dependent on the counselor to take steps to manage or improve her credit standing.”

This is the latest in a series of moves FICO has made to make credit scores freely accessible to more consumers. For example, Discover and Barclaycard credit cardholders are among the consumers who can get their FICO scores for free, because of an agreement between FICO and the card issuers. This new agreement is a bit different, because it targets consumers who are actively trying to rebuild damaged credit — arguably, a group that most needs to access and understand their credit information.

The agreement only concerns FICO scores purchased by credit counselors on behalf of their clients — depending on the agreements in place, counselors are still unable to share with consumers their other scores and credit reports. The CFPB blog post notes that Experian is “updating its policy and nonprofit counselors that purchase credit reports on behalf of their consumer clients will soon be able to share that those reports, as well as the scores, with the consumer.”

If you’re struggling to make a plan to rebuild your credit and are curious about what nonprofit credit counselors have to offer, be sure to research your options. Ask credit counselors questions about their services and what they cost, and make sure they’re qualified to help you with the problems you’re encountering. Consumers are entitled to a free copy of their credit report every year from each of the three major credit reporting agencies through AnnualCreditReport.com. You can also get two of your credit scores for free, updated every 14 days, on Credit.com.