New Offerings from Credit Karma and Experian Not as Helpful as they Appear

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

By Consumers Union on Wednesday, January 7th, 2015

Many consumers make a New Year’s resolution to check their credit reports and scores. We’re all in favor of that, especially as Consumer Reports recently found that just under half of Americans have never checked one of their credit reports from the credit bureaus Experian, Equifax, or TransUnion.

This year, two companies say they will make your credit information more accessible. The website Credit Karma announced last week that it will give consumers their Equifax credit reports without charge, in addition to the TransUnion credit reports that they already offered. It also announced that it will add VantageScores based on Equifax reports to their credit score offerings. Finally, the credit bureau Experian will sell FICO scores through its own website and make them available to credit monitoring subscribers.

Will consumers benefit from these developments? Consumers already have access to one free Experian, Equifax, and TransUnion credit report each year through the website annualcreditreport.com. It’s the only site that you can trust to obtain a legitimately free credit report, since the federal government requires the “big three” credit bureaus to maintain the site. In contrast, using Credit Karma may expose you to credit offers that you don’t want.

Credit Karma’s credit-score offerings may not be as great as they seem, either. While some lenders use Vantage Scores, most use FICO-brand scores. So, there’s a good chance that you won’t be viewing the same score as your lender when you use Credit Karma.

Experian’s decision to offer FICO scores is good news for Experian customers that are already signed up for credit monitoring, since they’ll be getting FICO-branded scores that may be similar to the ones their lenders likely see. Still, those monitoring services can be pricey!

That’s why we’ve been demanding legislation that will provide all consumers with free credit scores, for all product lines. We ask Congress to enact legislation this year that would secure that for consumers.

We also encourage you to get the lowdown from Consumer Reports on raising your credit score and fixing credit report errors.

How often do you check your credit reports and scores? Do you have an alarming credit score story? Please share your story here!

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