The credit score world just got turned on its head. Today, FICO announced that millions of consumers would now have access to their FICO scores without paying a dime. And without jumping through hoops.
The initiative is called “FICO® Score Open Access,” and the gist of it is that the FICO scores lenders buy to assess a potential customer’s creditworthiness can now be shared with customers free of charge.
So the actual credit score used to make the lending decision will be disclosed to the consumer.
For the record, in some cases consumers already get free access to their credit scores when they’re used in lending decisions that result in a declined application or less than favorable credit terms.
But this takes things a step further by letting all existing customers see where they stand.
Two Credit Card Issuers Are Offering Free FICO Scores
At the moment, two major credit card issuers are onboard, including Barclaycard US, and First Bankcard, the credit card division of First National Bank of Omaha.
Customers with Barclaycard Ring, Barclaycard Arrival, Barclaycard Rewards, Juniper, Frontier and Carnival cards are all eligible to opt-in to the free FICO score offer.
Once logged in, simply click on “tools” and then access your score. From there, you’ll be able to see your actual FICO score, the top two factors affecting your score, and a chart that displays historical changes (up to 12 months of data).
Cardmembers can also receive alerts whenever Barclaycard is notified that their FICO score has changed.
First National Bank of Omaha credit card holders can also view their “FICO® 8 Bankcard Score” 24/7 online without incurring any charges.
Note that there are many options under the FICO® Score Open Access program, and different companies may provide different features like charts and history.
FICO also indicated that participating companies would have the ability to share the free FICO scores via paper statements and/or mobile devices.
What’s the Catch?
While this all sounds amazing and almost too good to be true, FICO simply calls it a “push for greater transparency in banking.”
It’s unclear if this a regulatory thing or more of a strategic move to firmly place FICO at the top of the credit-scoring world. They’re already there, but it could be a preemptive move to stave off VantageScore. Or to compete with the likes of Credit Karma and Credit Sesame.
Additionally, they might be charging banks and credit card issuers to take part in the program, seeing that they’re getting the opportunity to market free FICO scores to individuals that take out credit cards or become customers.
And with greater credit score awareness, participating companies will be able to cross-sell other products to an empowered group that better understands (and respects) their own credit.
The obvious downside is that you have to be a customer or apply to be a customer to take part, assuming you’re not already a customer.
So it’s great for those that are existing customers, but for consumers in the dark about their scores, it’s still a bit of a catch-22.
Lastly, you’ll only get access to a FICO score from one of the three major credit reporting agencies, meaning scores could still vary if another bureau is used.
But if you have free access to your FICO score with several participating banks, it’s possible to get all three FICO scores free of charge. Not a bad deal.
Within 12 months, FICO expects to provide free FICO scores to over 25 million consumers via the FICO® Score Open Access program.
Update: Discover announced that it is now offering free FICO scores for Discover it card holders. The Transunion-based FICO score will be updated monthly and available to view on each billing statement. The company noted that it counts as a soft inquiry.
I happen to have a Discover it card…and as promised, here is my FICO score, free of charge, from my latest statement:
(photo: eleonora mariotti)
I have the Discover it card and now get my Fico score for free. Very cool feature. I guess people don’t need to pay for them anymore.