Wells Fargo Offers Free Credit Score, But Does It Matter?
Wells Fargo is offering its customers a free credit score, but it’s not the score Wells or any other lender will use to make credit decisions.
“The number in this promotion is for educational purposes only,” Wells Fargo spokesman Ruben Pulido says.
The offer illustrates an issue the Consumer Financial Protection Bureau has been highlighting – that the scores sold or a free credit score given to consumers (unless they have applied for credit) are typically not the same ones used by lenders. In a report last month, the bureau said as many as 1 out of 4 consumers who request their credit scores might get a number that is “meaningfully different” than the one lenders use when the consumer applies for credit. This includes the scores found on many credit agency related websites and credit monitor websites, such as TrueCredit.com, CreditKarma.com, and CreditSesame.com to name a few. The free credit score found at these sites can vary by over 100 points because they do not use the same scoring criteria as the FICO scoring model.
The vast majority of lenders, over 90 percent, use FICO scores developed by a company of the same name. The next-largest seller of scores to lenders is VantageScore, a company formed by the three credit bureaus. Only one lender, Chase, has confirmed using this score in SOME of their financial decisions. There is currently no free credit score that is used in lending decisions.
Wells Fargo is offering customers a free Experian credit report and a free credit score based on that report. The score is built on the VantageScore model but it’s not the usual VantageScore.
“The score customers receive in this promotion is a custom VantageScore. It’s custom because we asked Experian to adjust the range of scores slightly so it more closely aligns with other standard ranges out there,” Pulido says.
The custom score ranges from 300 to 850 – the same range as FICO scores. Standard VantageScores range from 501 to 990. It appears Wells Fargo has opted to make the score seem closer to FICO, in order to spike applications to their products by current customers.
Although consumers can get a free copy of their credit report from each of the three bureaus once a year at annualcreditreport.com, they are not entitled to a free score except in certain cases when they apply for credit.
Consumers can buy scores, alone or as part of a credit monitoring service, although a few sites give them away free and these scores are also not used by lenders. The only place online you can purchase a true FICO score, one used by lenders, is at MyFico.com
Wells customers can get their free, no-obligation credit report and score through Nov. 15 by going to a branch and asking for a unique access code.
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