Have you ever paid to receive your credit score?
It’s only natural that you’d want to see what your credit score is before you buy a house, car or another big purchase.
Studies from Consumer Reports and the federal government, however, call into question whether you should even bother.
While millions of consumers have paid $20 to get their FICO score, Consumer Reports says that the credit scores that they receive are often not the ones that lenders consult.
Consumer Reports isn’t going out on a limb with these allegations.
After analyzing credit scores from 200,000 credit files, the federal Consumer Financial Protection Bureau advised last fall that consumers can’t know whether the scores that they purchase from Fair Isaac and other sources will be accurate or not.
Consequently, the CFPB report said, “consumers should not rely on credit scores they purchase exclusively as a guide to how creditors will view their credit quality.”
The federal credit-score studyopens PDF file concluded that different credit-score formulas placed 73% to 80% of consumers into the same category of creditworthiness. But 20% to 27% of the time consumers were put in a wrong credit category. The scoring discrepancies were greater for consumers who were older and more affluent.
Here are tips from Consumer Reports on how you can protect yourself from what it characterizes as the “credit-score shell game:”
1. Ask to see the score used by a lender or insurer before agreeing to a loan or insurance policy.
2. If you do purchase your credit score and a lender or insurer later tells you that your real score is higher or lower, demand a refund from your credit-score provider.
3. Shop for credit with numerous lenders to find the best rate. Getting lots of quotes will reveal the best deals that will probably be based on many scoring formulas.
4. Get your free credit report from each of the main three credit bureaus – Equifax, Experian, TransUnion and by heading to AnnualCreditReport.com. It’s best to stagger your request among the three bureaus every four months.