Free Credit Score

A credit score is the only optimum rundown or breakdown of a consumer’s credit worthiness. Popularly known as a FICO score, in reference to Fair Isaac Corporation, the company is where the system originated and currently being made the basis in calculating the credit worthiness of a consumer with a credit score number.

A credit score is a condensation of all your credit report information by using a FICO formula designed to present to the lender a quick, precise foresight of the risk they may gamble or take in providing you a loan or credit. Most lenders have affirmed their belief to the credit score’s significance in simplifying the financing process and give more chances for consumers to obtain loans.

A FICO score may range between 300 up to 900. Obtaining a high score could mean better terms to get for your loan. Most credit scores you can get online but with corresponding fees. Lenders approve your loan and what interest rate to give you on the basis of your FICO score.

Credit companies have kept credit score information from the consumers until recently, starting July 1, California state law began requiring all credit bureaus to provide credit scores for consumers who request them.

The three major players like Equifax, Experian and TransUnion, are now into selling credit scores with credit reports to consumers for a fee.

E-Loan, a company who started a crusade for free credit scores have provided them for free last year through the net but without a credit report. Led by its president, Chris Lansen, E-Loan launched a campaign to give people free credit scores without a fee.

In the beginning, E-Loan was supplying free credit scores for about 42 days but was prevented by Equifax who stopped giving E-Loan information on consumer scores. It was learned, it was due to a FICO request, the company from which the credit bureaus scoring formula originated. The FICO score is the recognized yardstick of credit scores. E-Loan uses a different formula from a competitor, Neuristics. They call it CreditXpert Credit Score. Therefore, when E-Loan was forestalled in giving free credit scores, E-Loan turned to lobby their campaign to the State Legislature to compel the credit bureaus to supply them credit scores. Similar bills are expected to be filed this year at the US House and Senate. It is to the belief of E-Loan president and the company, each consumer will benefit and be able to manage better their credit, and debts like a pro if they are made aware of their credit scores together with the rates of interest that goes with it and the expected fees to pay. Knowledge of your credit score can give you leverage to negotiate better terms for your intended loan.

Therefore, a good advice will be, until a free credit score is provided to the consumer, it is wise to shop initially from the three major credit bureaus for their corresponding fees required to purchase a credit score for comparison.