Forum: money.stackexchange.com
Tags: <united-states><credit-score>
Title: Why are banks providing credit scores for free?
Question: It used to be that you had to pay to see your credit score and that credit scores were kept a "secret" so you'd never know what it was when you went to apply for a loan. However, now, almost every bank is offering people their credit scores for free (even if you aren't a customer of that bank). Why are banks all of a sudden providing people their credit scores for free?

Answers:
sents: text: I think the biggest reason is price ; it's a lot cheaper now than it was to offer these.
text: That's because for the most part, when you get a credit score for free, you're not getting a true FICO score.
text: You're getting instead a VantageScore.
text: VantageScore was created by the three credit bureaus , and as such they can offer it without paying Fair Isaac a licensing fee.
text: That makes it a lot cheaper to offer, and while it's not absolutely identical to FICO (or more accurately to any of the FICO provided scores)
text: it's close enough for most peoples' purpose.
text: And of course undoubtedly Fair Isaac has some price pressure on their side now that Vantage is big enough that many people see them as fungible.
text: As such they've had to make it easier, or they'd lose business - no longer being a monopolist.
text: The other relevant piece here is that probably in many of these cases they're really just offering you what Experian would give you directly -
text: so it's just a cross-marketing thing (where Experian, or perhaps another bureau, gets access to you as a customer so they can up-sell you ID theft insurance and whatnot, while the bank gets to offer the free score).
answer_details: author: money.stackexchange.com/users/12894/Joe
score: 5
sents: text: Why are banks all of a sudden providing people their credit scores for free?
text: Because it is a really good idea.
text: On an ABC Bank website, it has:
text: "Check your credit score for free" button.
text: You click it.
text: Not only will it come up with a credit score, but it could also trigger a marketing workflow.
text: If it is direct mail, email, or a phone call a banker could contact you for help with a debt product.
text: This marketing could also be targeted, say a person with a high score could be targeted for a mortgage.
text: A person with a low or medium score could be targeted for ways and products to improve their score.
text: Now if you run XYZ bank and not do the same, you are losing a competitive advantage to banks that offer this.
text: Not only will your customers be less happy, but you will lose a great marketing opportunities.
text: Face it, the only people that worry about their credit score are people that are in the market to borrow.
text: Which again, is more information.
text: If you have someone that never checks their credit score, or has their credit frozen, then it is wise not to market to them debt products.
answer_details: author: money.stackexchange.com/users/10613/Pete B.
score: 4
sents: text: Two possible reasons: The banks are already soft pulling your credit every month to see what sort of pre-approved offers they want to present you.
text: Since they already have the information they are providing it to you as an additional feature.
text: The bank wants to know your credit score, and waits for you to initiate by viewing your credit score through their website.
text: As soon as you initiate it, they make the soft pull and now they have the information also.
text: You can tell which scenario it is based on the credit history they provide you.
text: If you look at the history and they show you your scores for each month, even though you didn't initiate it, then they are auto checking it each month.
text: If the historical dates are only on the dates you clicked on the button, they are only checking when you manually click on it.
text: As for the why they provide it, a few years back it was a desirable feature.
text: Now they all do it just to keep pace with everyone else.
text: Note that most banks only provide a single scoring model from one bureau (but different banks use different bureaus).
answer_details: author: money.stackexchange.com/users/17718/TTT
score: 2
sents: text: It's the inevitable result of the Fair, Isaac Company deciding to sell access to credit scores to the general public: some marketing dude at one of the banks thought, "Wouldn't it be a great idea if we could use 'free' access to FICO scores as a differentiator for our CCs?"
text: And, because most humans play follow the leader, soon enough, other banks were paying FICO a license to present FICO scores to their card holders.
answer_details: author: money.stackexchange.com/users/22266/RonJohn
score: 1
sents: text: An alternative take on the "why" is that most people's credit is better than they think, and all of these banks offer credit products.
text: Put a "good credit" badge next to an ad for a shiny new card or auto refi, and it's just good business.
answer_details: author: money.stackexchange.com/users/59367/Rakurai
score: 1

Summary of the answers:
It's a lot cheaper now to offer credit checks. If it's a free score, then it's often not accurate. The banks are also soft pulling credit scores to see what they can offer you, so it's easy for them to offer you a free credit check.
One of the reasons is that it is a lot cheaper now than it used to be to offer these. Plus, when you get a credit score for free, you're not getting a true FICO score. In addition to offering a credit score, it may also trigger marketing workflow and the bank gets to see your what sort of pre-approved offers they want to send you.