Apps Offering Free Credit Scores Have Big Drawbacks

Popular apps that give you free access to credit scores often have hidden costs and may not offer the information you need to see, according to a new Consumer Reports investigation.

Federal law states that each year, every American can access one credit report from each of the three major credit-reporting companies — Equifax, Experian and TransUnion. But credit reports generally do not include credit scores.

Consumers generally still have to pay to see their credit scores, although there are a number of ways to see these scores for free. In fact, some companies have created apps promising to give consumers a glimpse at their scores.

However, CR found these apps often leave much to be desired. In a press release, Syed Ejaz, financial policy analyst for Consumer Reports, says:

“Most of the apps we examined offer credit scores that aren’t typically used by lenders and come with other drawbacks, like unnecessary costs and privacy risks. No one should have to pay extra and trade away their personal data to private companies just to access their own credit information.”

The CR investigation looked at five popular apps:

• Credit Karma
• Credit Sesame
• Experian Credit Report
• MyFICO
• TransUnion: Score & Report

CR found that three of the five apps offer access to credit scores that are not typically used by lenders when evaluating potential borrowers’ creditworthiness.

As one might expect, only MyFICO offers access to the FICO score used by the vast majority of lenders, as does Experian Credit Report. Unfortunately, MyFICO charges $19.95 a month and Experian Credit Report charges $19.99 per month — more than $200 per year.

Perhaps worse, four of the five apps — Credit Karma, Credit Sesame, Experian Credit Report and TransUnion: Score & Report — require consumers to pay for access to their credit reports, CR says.

Paying for such reports typically is unnecessary, particularly now. By law, consumers can get these reports for free once per year simply by visiting the AnnualCreditReport.com website. In addition, until April 2022, consumers can access these reports for free weekly.

Consumers who use these apps also may put their privacy at risk, CR says.

The publication found that all of the apps it analyzed collect “a substantial amount of private information” from consumers and may share the data beyond parties that are named in the apps’ privacy policies. According to CR:

“This extensive data collection may not have immediate benefits for consumers, and could pose a privacy risk, especially in light of numerous data breaches at credit bureaus and data brokers over the years.”

Consumer Reports is asking app providers to improve what they offer to consumers. The publication also wants Congress to pass legislation guaranteeing the right of all Americans to have free and unlimited access to both credit reports and scores.

However, you don’t have to wait for Congress to act before gaining access to your FICO score for free. For more details, check out “7 Ways to Get Your FICO Credit Score for Free.”