Since late 2013, more than 25 million credit card holders have
regular access to a free credit score
through their credit card issuers. Select Discover, Barclaycard
U.S., First Bankcard, U.S. Bank and Capital One cardholders receive
a credit score in either their monthly statement, online account or
But that free
may not be the comprehensive, tell-all number you think it is.
FICO's Open Access program that launched in November 2013 gave
lenders the ability to share the score they were already purchasing
for their own use with their customers for free.
However, many of these free scores aren't calculated the same
way as the ones lenders may pull for your next auto loan, mortgage
or even credit card, but they can still help you monitor your
general credit standing. This is not to say that the free score on
your monthly credit card statement is inaccurate; different credit
scores are just used for different purposes.
U.S. cardholders now receive a monthly FICO "general risk score,"
which, as its name suggests, discloses a general lending risk for
any type of credit product. These scores range from 300 to 850
based on data pulled from the three major credit bureaus
(Equifax, Experian and TransUnion). Discover gets its data solely
free FICO scores are designed to "weigh consumer behavior with
credit cards more than other factors," according to First
Bankcard Vice President Mihaela Kobjerowski. These scores range
from 250 to 900.
customer who signs up for the free score through its online
banking site will see an Experian FICO score ranging from 330 to
830. Unlike First Bankcard's credit card-oriented score, this
score weighs a customer's overall credit risk.
cardholders have access to a free TransUnion Education Score,
which is an approximation of the actual scores used by lenders to
make credit decisions and, like FICO, falls in a 300-850
Understanding the differences
Credit scores are derived from data included in an individual's
credit report and the scoring model used to analyze that
information. Because different lenders request different criteria
from the credit bureaus -- as well as from other data gatherers --
and do not all use the same formula, credit scores will vary, even
among the major
"Consumers will almost certainly see a different number from
each place, but that doesn't mean that a free score they receive
now isn't beneficial," said Rod Griffin, director of public
education for Experian.
FICO scores are the most widely recognized scoring model,
influencing approximately 90 percent of the lending decisions made
in the U.S., according to the company. The formula used for the
FICO credit score model weighs payment history, amount of debt
owed, length of credit history, new credit and types of credit
used. Each of the three major credit bureaus (Equifax, Experian and
TransUnion) generates a separate FICO score based on its data in an
individual's credit report, which varies between the bureaus.
Depending on whether a credit score is meant to assess overall
risk, or risk for one type of credit, the formula may be adjusted
at the lenders' discretion, according to FICO Senior Consumer
Credit Specialist Anthony Sprauve.
"The tweaks are to optimize the scores for specific lending
processes, such as mortgages or credit cards," he said. "However,
if a cardholder sees variations between FICO scores, they will
likely be very minimal."
Making the scores work for you
Before consumers can begin to benefit from any type of credit
score, they will have to understand what the potentially varied
numbers represent. Avoid comparing apples to oranges or, in this
case, general risk scores to more tailored lending scores, said
"The numbers are nice so long as you understand the range those
numbers are coming from and the risks on that particular scale,"
said Griffin. "Even if you get scores with the same range, if they
are for different types of lending, you could get a different score
for each, depending on what you are more or less at risk for.
That's perfectly fine and that's what should happen. Just be aware
of those differences."
As a general rule of thumb, the lower the number, the higher a
lending risk you are to lenders. Kobjerowski recommends avoiding
getting stuck on numerical differences by focusing more on what the
scores represent. It's the information those numbers provide that
should guide your financial behavior, she said.
"If I was a consumer looking at two companies, and one gave me a
760 score and the other a 740, I wouldn't get too hung up on that,"
she said. "I would know I was in the 700s, and that is overall
The increasing availability of free credit information doesn't
have to be confusing and is something consumers should not take for
granted, according to experts. Free credit scores are a useful tool
to help consumers stay on top of their finances and avoid
surprises, according to Discover's Senior Vice President of Brand
and Acquisition Julie Loeger.
"Credit scores are one of the most important factors that
lenders take into consideration when consumers make decisions about
buying a house, renting an apartment or getting a credit card," she
Even if you aren't in the midst of taking credit-based financial
action, being able to keep a close eye on your credit score can
help prevent fraud, said Kobjerowski
"If you suddenly see your score drop significantly one month and
you know nothing happened on your end, you probably have a good
reason to check and see if something is fraudulent in your
account," she said.
Regardless of the way it is measured, credit is an important
aspect of everyone's daily lives, and the more consumers can be
educated about their financial wellbeing, the better, according to
"After all, your credit is the foundation of your financial
house," he said.
Cards with free credit scores
Discover expands free FICO credit score program
CFPB calls for free credit scores