Photo: Credit Karma
In the last few years, several “free credit score” type of companies have emerged, offering a legitimate free credit score without any trial membership games.Two of the most prominent are Credit Karma, which gives you a look at your TransUnion credit score, and Credit Sesame, which gives you an Experian credit score.
Neither gives you a FICO credit score, which is used by most lenders, but the credit bureau specific scores are good enough. Plus they’re free.
First, a little background. Years ago, the only way to get your credit score was to pay or sign up for a trial membership to a credit monitoring service. FreeCreditScore.com, you may remember their commercials, is a company owned by Experian, one of the three major credit bureaus, and they offer a free score if you signed up for a 7-day free trial. After 7 days, you were enrolled in their monitoring program and were billed $14.95. You could cancel at any time but that relied on you remembering, or realising, to cancel.
The new breed of free credit score services don’t rely on trial memberships. They rely on advertising. When you sign up for a service like Credit Karma, you aren’t signing up for a trial membership in anything. You don’t have to remember to cancel to avoid a fee, you simply sign up and check your score whenever you want. They are able to do this because of advertising.
When you sign up, the services are able to look into your credit report and try to find ways to save you money. They will recommend better credit cards or suggest refinancing. Each of these offers are forms of advertising. Sign up for a new credit card, the services get a cut. Refinance, they get a commission. While this may colour their suggestions, you are always free to go elsewhere to continue your research if you’re concerned about bias.
You might be wondering, as I did, are these scams? It requires a lot of trust to provide your social security number, especially online. Whereas a service like FreeCreditScore.com might be more of a headache, it’s run by one of the three credit bureaus. Credit Karma and Credit Sesame are independent companies with a business relationship with one of the bureaus. I did a look at whether Credit Karma was a scam or if Credit Sesame was a scam and came up empty on both, they both appear legitimate. They have all the necessary security precautions in place and they do work with the bureaus. While we can never be 100% sure, I found them to be trustworthy.
In the end, I prefer the new breed of free credit score services because they don’t try to get you to sign up for a service you probably don’t need. If you’re no concerned with some extra advertising, it’s a better route than a trial service you have to remember to cancel.
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