Even though federal law gives Americans access to free credit reports three times a year, credit scores remain a mystery to many consumers. FICO and all three credit reporting bureaus use complex, confidential scoring systems to turn your credit history into a three-digit rating that many banks use to evaluate credit card applications.
Because banks don't own the rights to credit scoring algorithms, they can't offer free credit scores directly to account holders. Credit unions enjoy a different relationship with FICO, however. A partnership struck at the height of debate over the Credit CARD Act resulted in FICO supplying many credit unions with free or discounted access to credit scores for their members.
For instance, the Pennsylvania State Employees Credit Union and the Digital Federal Credit Union have both included free FICO score access directly into their online banking systems. Members can log in throughout the year to review changes to their credit scores. Many other credit unions have authorized employees to share FICO scores with members at no charge during branch visits or phone calls.
Bigger banks have largely avoided the credit score business, preferring instead to co-brand and market third-party credit score monitoring services. However, a handful of companies offer credit scores as part of identity protection and credit security programs.
For example, American Express offers credit scores and credit reports from all three bureaus under the CreditSecure banner. Likewise, Citi markets its own credit score monitoring service, called Citi IdentityMonitor. Both services charge a monthly fee after a 30 day trial period, separate from monthly fees attached to any member credit cards.
When reviewing your credit score, look for two key pieces of information:
- The credit scoring algorithm used, and
- The credit report data fed through that algorithm.
Because each of the three credit reporting bureaus maintains an independent file on your consumer history, the same credit scoring algorithm could produce three different scores, depending on which file it reviewed. In addition, credit bureaus sometimes use their own alternatives to FICO's scoring system, creating even more opportunities for variation. Ask the right questions to get a true, "apples to apples" comparison of your credit score over time.