5 Reasons to Ditch the “Free Credit Score”
Did you know that 90% of top lenders use your FICO® Scores to determine loan interest rates, terms & approvals?
Yet most “free credit score” services (Credit Karma, Credit Sesame, etc.) provide what’s called a VantageScore, not your real FICO Score.
So why are you checking a different type of credit score than what your lenders would see? Because it’s free?
Here are 5 Reasons to Ditch the “Free Credit Score”
Reason #1: You Get What You Pay For
People love free! I love free too.
But let’s be honest – you get what you pay for.
Do you have NetFlix? If you do, then you probably know how amazing it is for the price (I pay $13.99/mo for it).
What’s the alternative to NetFlix? Free over-the-air, local TV?
Over-the-air programming is “pretty good” in general. But if you put it up against NetFlix, I think we can all agree – it sucks in comparison!
In my opinion, it’s the same with a “free” service like Credit Karma vs a top premium credit monitoring service like Experian IdentityWorks.
Reason #2: It’s the “FAKO” Score
Most consumers are getting their VantageScore 3.0 credit score.
But most lenders (90%) are checking their FICO scores.
This can result in a big difference between the score consumers are seeing vs what the lenders see.
When you’re planning to apply for a loan or looking for a new credit card, it’s important to see the score that most resembles what your bank or lender will see.
Free Credit Score = VantageScore = “FAKO” Score
The VantageScore is a credit scoring algorithm jointly developed by the “Big 3” credit bureaus (Equifax, Experian & TransUnion) in an effort to compete with FICO.
Also known as an “educational score”, or a “FAKO” score – your VantageScore is basically a cheap imitation of your true FICO score.
Is it successful?
Yes! But mostly just with consumers, generally not with banks and lenders. Most people who are checking their own credit score, are receiving their VantageScore.
Is it accurate?
Not so much! It gives you an idea of what range you are in and what factors go into calculating your score, but in my experience it’s not an accurate representation of your actual FICO score.
Reason #3: Little to No ID Theft Protection
Your credit and identity are at risk.
If you have a credit report, you’re probably one of the 143 million American consumers whose sensitive personal information was exposed in a data breach at Equifax, one of the nation’s three major credit reporting agencies.
With all the data breaches and nefarious “dark web” activity going on these days, it’s important to have a solid credit monitoring and ID theft protection service working to help protect your credit and identity.
Don’t count on the “free” services to protect you.
The “free credit score” sites like Credit Karma are severely lacking in that area. They will provide your credit score, and maybe some basic credit monitoring, but that’s about it.
That’s not enough to keep your credit and identity safe. You need more extensive ID theft protection and full 3-bureau credit monitoring.
My private info was exposed.
I recently found out that I’m one of those 143 million Americans whose information was exposed in the Equifax data breach.
That’s when I realized I needed to get serious about ID theft protection. Learn how I protect my credit & identity
Reason #4: You Need 3-Bureau Scores, Reports & Monitoring
Most “free credit score” providers only give you 1 credit score, and if you’re lucky, some may provide 1 bureau monitoring.
The fact is, there are 3 major credit bureaus, and all 3 are equally as important to monitor for many reasons. The most important being to help detect signs of credit and identity theft.
Think of it this way:
If you were concerned about a flat tire on your car, you wouldn’t just check one of your tires, and assume the rest are fine, would you?
It’s the same with your credit reports. You can’t just check one credit report and score, and assume the rest are doing just fine. You need to monitor all 3!
Reason #5: Check For Errors Before You Apply
Before you apply for a loan, it’s very important to check all 3 credit reports and scores for errors that could stop you from getting the credit or loan you’re applying for.
I’ve applied and been approved for 3 different mortgages, each time my FICO Score is what they looked at to determine my credit worthiness.
I’ve also applied and been approved for around 10 auto loans (wow, 10?). Again, each one of those lenders used my FICO score to determine my eligibility for the loan, as well as my interest rate and loan terms.
But you never really know which credit report they will check, or if they will check all 3. So you need full access to your 3-bureau reports and FICO scores before you apply.
Best way to monitor your 3 Reports & FICO Scores?
What I use, and why:
I’ve tried pretty much everything out there as far as credit monitoring and ID theft protection, and in my opinion, there are only a few good ones.
So what’s the best way to monitor your credit and protect your identity?
My #1 pick – Experian IdentityWorks Premium
I use a service called Experian IdentityWorks Premium to monitor and protect my credit and identity. It’s actually slightly cheaper than many other premium credit monitoring and ID theft protection services.
Even with being slightly cheaper, the benefits of IdentityWorks Premium are second to none!
What is Experian IdentityWorks?
Experian IdentityWorks is a comprehensive Credit Monitoring and Identity Theft Protection service. Its top priority is to protect you from identity theft, but it’s also (in my opinion) the best credit monitoring and identity theft protection service currently available.
Benefits of IdentityWorks Premium (the one I use):
The IdentityWorks Premium includes the following:
- Quarterly 3-Bureau FICO® Scores
- Daily Experian FICO® Scores
- FICO® Score Tracker
- 3-Bureau Credit Monitoring and Alerts
- Dark Web Internet Surveillance Alerts
- Financial Account Takeover Alerts
- Social Security Number Trace Alerts
- Change of Address Alerts
- Court Records and Booking Alerts
- Non-Credit Loan Alerts
- Sex Offender Registry Alerts
- Social Network Monitoring Alerts
- Identity Validation Alerts
- Experian CreditLock with Alerts
- Up to $1 Million Identity Theft Insurance
- Dedicated Fraud Resolution Support
- Lost Wallet Assistance
Pricing: 30-Day Free Trial, then $19.99/month after that.
I definitely recommend IdentityWorks Premium (it’s what I use). I believe it’s the most comprehensive credit monitoring/identity theft protection service available.
Especially with the recent Equifax data breach, you can’t be too careful. I recommend this service to everyone I talk to because I feel like it’s a great value and a top notch service.
After all, it only costs 66 cents a day. It’s well worth it for the features and peace of mind it provides.