Are Free Credit Score Sites Accurate?
Yesterday, the Consumer Financial Protection Bureau put in a request for information (RFI) in the Federal Register seeking information about websites offering free credit scores. The bureau wants to learn more about how consumers have benefitted from having increased access to free scores and which sources consumers are using to review their scores.
This brings up a valid question: are free credit score sites accurate, and what can you do to make use of the available information? There are several ways to access free credit scores. The method used to collect this data will determine how “accurate” the results are.
Each source uses a different bureau or collection technique to calculate your score. Discover uses TransUnion credit scores. If you apply for a loan with a bank, the bank may look at your Experian score instead. This may be higher or lower than the free score you found on your credit card statement.
Timing can also influence the accuracy of your free credit score. If the score is pulled before you make a large payment on a loan, it may be lower than shortly after you make the payment.
Hence, free credit scores are accurate, but only to a certain degree. You should not rely on a free credit score as a direct representation of your credit worthiness, but rather as a tool to monitor positive and negative changes in your credit. It’s just like weighing yourself at home versus at the doctor’s office. The scales may be a little different, but the changes between weigh-ins should be similar.
In the RFI, the CFPB asks how access to free scores has changed consumer behavior, if at all. Are consumers more likely to increase payments if they have a low score, or do they continue to accumulate or pay off debt like before? Ideally, you should use a negative change in your credit as inspiration to adjust your payment schedule or pay off existing debts.
In March, the CFPB published a list of free credit score providers, including major banks like Chase. The bureau posted a notice along with their RFI saying they will update their list based on responses to the notice.