March 16, 2010
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FICO Encourages Treating CC Consumers Better, Pt.2
Alternatives.Although the FICO score plays an important role in the decisions of financial institutions in determining whether or not to extend credit to an individual, there are other companies that offer free access to an individual's credit score. Each company varies on how they calculate your credit score. Most typically they use the same information such as: Credit card balances and payment histories, Mortgage payment histories, Length of credit history, and other relevant credit information. Unknown to most credit card customers is that these other options will not cost. The scores revealed may not match exactly with the FICO score due to the various methods used by the other organizations, but the score is usually a close match for the FICO. Even better, is that credit card customers are not required to get their bank's permission to access the score.
One company growing in popularity that offers a free monthly credit score to all credit card customers, is Credit Karma. The company can be easily accessed online at http://www.creditkarma.com. Credit Karma offers credit card customers more than just a free credit score, the company has a wealth of information to assist Americans in managing their finances including education on how to understand the scores plus information on how credit scores work. The company boasts that its goal is to empower Americans to better manage their credit and experience a healthier financial life.
Another confusing bit of information is that not only are credit card consumers subjected to the mystifying FICO score, they must deal with at least a minimum of six different varieties of the FICO score in addition to the other credit scores of major companies such as Credit Karma. Each of the three major credit reporting companies, TransUnion, Equifax, and Experian each produce a FICO score which varies slightly because of the model the company uses. Most financial institutions will utilize these major companies. However, as you see in part three, there are changes on the way with even the FICO.