There's a lot of free credit scores floating around the Internet, but as I've written about in previous posts, none of them are actually credit scores that matter. Often advertised by the credit bureaus themselves, these scores may give you a rough estimate of where your true FICO scores stand, but that's about the only purpose they should serve.
If you ever want to know your real FICO credit scores, the ones the vast majority of lenders rely upon when assessing your credit risk, the best option has always been to purchase them directly from myFico.com. And while this is still the case, many consumers will now have a way to get a peek at their FICO scores for FREE.
Don't get too excited though—it's not as great as it sounds. Here's how things have changed.
Obama signed the most sweeping financial reform bill since the Great Depression into law yesterday morning. Often called FinReg, the law includes stricter rules for Wall Streeters and the establishment of a new Consumer Financial Protection Bureau, which will oversee financial products such as mortgages, credit cards, and payday loans.
FinReg also includes a section known as the FACS Act, or the Fair Access to Credit Scores Act, which was sponsored by Sen. Mark Udall (D-CO) and gives consumers the right to see their credit score if they are denied for something or even if they are approved but didn't get the deal they asked for due to their credit score.
So, if you apply for a new credit card and are denied because your FICO score isn't high enough, your lender will now be required to give you a free copy of the FICO score they used. If they used a different credit score, that's the one you would get instead, but most lenders do use a classic FICO score or some variation of it. This isn't ideal, of course, since none of us want to be denied for anything, but it's definitely a big change worth noting.
Unfortunately, we don't know exactly when the FACS Act will take full effect. My guess is it's going to take awhile for all the banks to make the necessary changes to their systems in order to comply with the new regulations. However, we should certainly see the change implemented before the end of the year, or perhaps even as early as the end of the 3rd quarter.
