Free FICO Score
While federal law mandates that you have the right to get your free credit reports once a year, the same law authorizes credit reporting
agencies to charge a reasonable rate for the Fico score. When you apply for your credit report with MyFico or any of the three credit reporting
agencies, the report will not include your Fico credit score. To get your Fico score you will be asked to pay a separate fee. However, there are other
ways you can get your Fico score for Free and from legitimate sources:
From a mortgage lender. When you apply for a mortgage or home equity loan, the mortgage lender will look at your Fico and either
grant or deny you your loan application based on your Fico score
and your credit report. While discussing your loan application, ask your mortgage lender what your score is.
From a lender who has denied you credit. If you applied for a loan or a credit card and your application was denied, under the Equal Credit Opportunity
Act (ECOA) you have the right to find out the reasons for the credit denial within 30 days. If your Fico score was a primary factor in the lender’s decision, the lender
should explain to you why, and in the process give you your Fico score and free of charge. Contact the credit company or bank and ask them why you were denied,
and ask for your fico score as well.
From a respected credit card company. Some credit card companies such as Washington Mutual Bank will give you your free Fico score
if your credit card application is approved. Wamu’s Platinum MasterCard allows you to access your Fico score on their website at no extra charge and free. If you want to apply
for a Wamu credit card, or already have one and would like to access your Fico score, visit www.wamu.com.
What should I look out for when getting my Fico score for FREE?
Many websites and credit monitoring agencies will try to convince you to sign up for their promotional or trial package offers and tell you that if you do,
you will get your credit score for free. Here’s what you should know:
It may not really be free – Although you do get a free Fico credit score when you sign up for a trial credit monitoring program, the program is free
only for a short period, say seven days. After the trial period ends, if you don’t cancel your subscription, it will not be free anymore and the company will continue charging your credit card.
This means that if you don’t cancel, the Fico score wasn’t really free.
It may not be the real Fico score – . There are many companies offering what they say is a Fico score, but these are actually just approximations
of what your Fico score would be. Different companies have their own way of computing for credit scores, and usually add in other variables. They may claim that their score
is a Fico score but it may actually be just a clone, or what has come to be known as Fako score, meaning it’s a fake score.
An agency or company may have several different scores –. There are many companies that have different credit scores, so determining which one
is the real Fico score can be confusing. The only real Fico score is from these agencies, and under these names:
- Equifax’s Beacon Score
- Experian’s Experian/Fair Isaac Risk Model
- TransUnion’s Fico Risk Score, Classic
- MyFico’s Fico Score
Sites may give you wrong credit management advice – It is important to make sure when you apply for your Fico score that the website or
company you are dealing with is reputable. Some sites or companies may actually be giving you wrong advice – such as applying for several of their credit cards at the same time –
which may hurt your credit standing instead of helping to improve it.
When you’re applying for your Fico score, make sure you read and understand the company’s terms and the fine print on the website.
Double check to see what their credit score model is based on and why they are giving it for free. This will help you make sure that the Fico score you’re getting is a
real Fico score and it is really free and there are no hidden fees.
What can I expect when I look at my free Fico score?
Your Fico score is a three-digit number that summarizes the information in your credit report. The computation of your Fico is based on five factors:
your payment history, your unpaid or outstanding credit, the length of your credit history, new credit that you have applied for, and the types of credit that you use.
The computation of your Fico score takes into consideration all of these five factors. A change in one factor will affect the others, and this will
affect your fico credit score as well as the overall picture of your credit report.
For instance, if you have a good Fico score but apply for several new credit cards over a short period, that will tend to decrease your fico credit score. However,
if you are prompt in your payment of all your outstanding credit – including your new credit cards – this will positively affect your Fico and show that despite the new
credit you remain a good debtor.
On the other hand, if you have a fair credit score and were delayed in your payment for the last two months, your credit score would have decreased.
Making sure that you pay on or before the due date of your credit cards and loans for the next four or six months will positively affect your Fico score and bring it back up.
Why should I get my Fico score?
Carefully monitoring your Fico score will allow you to see how your credit reputation is progressing. It is advisable that you get your Fico score (not that it is not free) from all of the
three major credit reporting agencies, because each agency has a different method of computing for your Fico score – even if all three have based their formula on Fair Isaac’s model.
Lenders may not always use the same Fico credit score model when they decide whether or not to give you new credit. They also may not always tell you which of the three
agencies’ scores they are using, so in order to make sure all your credit scores are good – especially if you are planning to apply for a loan in the next few months –
you need to monitor all three Fico scores.
Your Fico score will change whenever there is a change in your credit report. It is important to note that actions that tend to lower the credit score, such as
delayed payments, will bring your Fico score down quite easily, while building it up again will take longer. For instance, a bankruptcy will make your Fico score plummet
immediately, and you will need months – maybe even years – of regular, timely payments to increase your score again.
The Fair Isaac Corporation advises that if you plan to apply for a big amount of credit in the future, you should check your Fico score (get it for free using above methods) six
to twelve months ahead in order to give you time to improve your score if necessary. On the other hand, if you are actively working to bring up your Fico score,
checking it quarterly or even monthly will be helpful in allowing you to monitor the changes in your score and credit report.
If your credit history has not been good and you are in the process of trying to repair your credit score or Fico, seeing the increase in your score – even if it
happens slowly – will serve as an impetus to help you get back to a pattern of correct and judicious spending.
What information is not included in the computation of my Fico score?
The computation of your Fico score does not take into account the following information:
- Your race, color, national origin, marital status, sex, or your religion
- Your salary, title, occupation, employer, dates of employment or your employment history
- Your address
- Your age
- Family support obligations or rental agreements that are reported as such
- Interest rates being charged on a particular credit card or other account
- Inquiries that you initiate or that are initiated by lenders without your prior knowledge
- Information not included in your credit report
- Information that will not help to predict your future credit performance
One thing that the Equal Credit Opportunity Act mandates is that a person’s race, nationality, gender, or marital status should not be used as a factor when
evaluating whether the person is eligible for credit or not. Lenders are prohibited from using these factors, and the Fico score does not include these in the computation.
This ensures that minority and non-minority applicants are equally and fairly treated through their Fico score whether they get it for free or pay fot it.
The Fico score is an important number that affects your chances of being eligible for new credit, especially when you most need it. Getting yours for free
and monitoring it carefully will enable you to ensure that your Fico score is increasing instead of decreasing, and if you manage your credit wisely you will be an attractive
and credit-worthy customer whom lenders will not mind giving money to.
