Free FICO Scores for 2 Million Consumers: Great First Step, But Further Reforms Needed

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We support reforms to the financial marketplace that protect consumers from unscrupulous banks and lenders.

By Consumers Union on Friday, November 15th, 2013

Is FICO’s new plan to provide free credit scores to certain credit cardholders a good deal for consumers?

Last week, FICO announced that it would provide free FICO scores, ones that are actually used in credit decisions, to clients of two credit card companies, Barclaycard U.S. and First National Bank of Omaha (FNBO).

This deal saves Barclaycard and FNBO customers from paying almost $20 for each of their credit scores – and it provides a score that lenders actually use, rather than just an educational score. FICO currently charges customers $19.95 each for FICO consumer scores based on the Experian, Equifax, and TransUnion credit reports. And, there’s no guarantee that lenders actually use the consumer-purchased scores to make a lending decision.

The Wall Street Journal’s MarketWatch blog gives FICO measured praise for this recent initiative. MarketWatch notes that it’s a good move for FICO, which is looking to expand consumer knowledge and awareness of the FICO score, and that it should provide a benefit to some consumers.

But MarketWatch also points out that only a scant 2 million of credit card customers – that’s under 2% of the total credit card market – will be eligible for a free score under this program, though FICO hopes to expand the service to 25 million by 2014. The free scores are available only to customers who already have an account with Barclaycard U.S. and FNBO.

Consumers Union agrees that FICO’s plan will help some consumers, but believes that further reforms are needed. Everyone deserves their credit score used by lenders for free – whether they are customers of a particular credit card company or not!

That’s why Consumers Union is working to pass the Fair Access to Credit Scores Act, a bill introduced in Congress last spring that would affirm a consumer’s right to a free credit score with each of their annual credit reports from the three major bureaus.

Join us in demanding that Congress require free, yearly disclosure of your credit scores, and show FICO and the credit bureaus that everyone should have free access to their credit information!

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