Discover is expanding its free FICO scores on monthly statements to all cardmembers after the success of the pilot program for “Discover it” cards.
More card-issuing U.S. banks could be following Discover’s lead in providing free credit scores on monthly bills, a trend which provides a long-overdue service to consumers.
The Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months. But that doesn’t include credit scores, such as the widely used FICO. Consumer advocates have pushed for adding that requirement to FCRA.
FICO, formerly known as Fair Isaac Corp., is negotiating with some of the largest credit-card issuers, Anthony Sprauve, the San Jose, Calif-based firm’s senior consumer-credit specialist, told Bloomberg this week, declining to identify the banks.
FICO scores are commonly used by lenders to determine a borrower’s creditworthiness. The higher the score, the greater probability of getting the best interest rates on mortgages and auto loans.
Discover is the first major credit card issuer to provide free FICO Scores directly to its cardmembers.
“The response from Discover it cardmembers – who already receive free FICO Scores on their monthly statements – has been overwhelmingly positive, so we’re thrilled to extend this service to other Discover cardmembers,” said Julie Loeger, senior vice president of brand and acquisition at Discover. “Knowing their score can help our cardmembers achieve their personal goals and better prepare to reach life’s many major milestones.”
In addition to providing free FICO Scores to consumer cardmembers, Discover is providing the two key factors explaining what information from a person’s TransUnion credit report influenced his or her particular FICO Score.
Understanding the key factors affecting t a FICO Score, which can include payment history, amount owed and length of credit history, can give consumers a better understanding of how lenders are making credit decisions about them, Discover says.
Cardmembers can view this information simply by logging on the Discover Account Center.