1SD Newsletter: April 2004
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AVM Fact Sheet

YOU NEED TO KNOW: ‘Free’ Credit Scores Seldom FICO Scores

Last month a client called: “Do you know anything about Internet credit reports?” he asked. A applicant had handed-over his “free” credit report and very little of it matched the data in his mortgage credit report.

The client was lucky, because I did know something. I had found dozens of Internet sites offering “Free Credit Scores” or “Free Credit Reports”, but I couldn’t figure-out exactly what they offered. I had also learned that legitimate credit reports are available from each of the three repositories, but they aren’t easy to get.

I talked with Karlene Bowen, Fair, Isaac’s Seminar Support Manager and a regular speaker on FICO scoring. She said I was lucky I didn’t order a report. It turns out those “free credit reports” almost never match the FICO scores on reports pulled by mortgage brokers. Worse, ordering a report from many of the sites can result in a flood of unsolicited junk mail and SPAM.

Then she said something that amazed me: Once you past the imitators “You only have 1 chance in 3 of getting a real FICO score” when you order a report from a bureau.

Surprisingly, only Experian issues FICO scores on free reports – Equifax and TransUnion don’t. FICO is a trademarked product of Fair, Isaac, and the bureaus pay royalties each time they use the FICO algorithm. So, unless you specifically ask for a FICO score EQF and TU will calculate scores using their own scoring model.