Something is being offered that is actually for free. No, really.
It is truly the case that lately some banks and credit card companies have been including a new benefit for their Mill Valley clients: free access to their current FICO credit score.
This isn’t the same thing as the ads we’ve been deluged with for years—the ones for “free” credit reports. Most of those wound up not really being completely free—at least not if you value your privacy (as in your email and other personal information). Most of them were bent on pitching you on surprisingly pricey subscription credit monitoring services. For anyone who placed value on the time it took to tell them “no” a half-dozen ways, these weren’t really “free.”
But if you are a lucky Marin County client of one of the outfits now providing continuous access to your FICO credit score, it IS interesting to click on it now and again. The score goes down and (we hope) up as various information flows into the FICO computers.
“FICO” is shorthand for the Fair Isaac Corporation, which is by far the dominant credit rating creator. But don’t be fooled: not all FICO credit scores are the same because there are three different companies (Equifax, TransUnion and Experian) who collect the data. They pay FICO to furnish their branded versions of the scores. Each one has FICO assign different weights to different parts of your history—and the result is to create three different FICO scores.
That’s why when you read a headline like Tulia’s “Magic Number: The Ideal Credit Score For Securing A Mortgage,” you’re right to be a bit skeptical, since an “ideal” credit score for Equifax and TransUnion and Experian would be unlikely to be the same. Nonetheless, the number given as “ideal” was probably pretty much about the best rule of thumb number you could realistically come up with: 740.
If 740 or higher is the ideal FICO number (considered to be in the ‘perfect’ range for mortgages), another (sort of) (mostly) correct number for Marin mortgage applicants was 660—which they thought was a credit score that would “land a better rate and avoid jumping through additional hoops” than would 620—the basic requirement “for most lenders” looking to originate a conventional home loan.
The “most lenders” qualification, along with the differences in the credit scores offered by the different companies, means that there is a lot of wiggle room that can affect not just whether or not an applicant is successful in being offered a loan for their new Marin County home, but what the terms of the mortgage will be. Given all that, it’s really impossible to take any one credit score number and say definitely what that will mean to your loan originator.
Who doesn’t appreciate being given free access to their FICO score—even if you aren’t quite certain what the rises and falls are going to mean? The only time you actually get a real-world answer to that is when you are ready to buy a home and submit your application. That’s another time I’m here to help!
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