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It used to be that people could only get one free copy of their credit report each year, and they still had to pay to find out their actual credit score. But over the last two years, since FICO launched their Open Access program, it’s become easier to find out your credit score for free.
Now over 100 million people have access to their FICO scores at no charge, according to the credit scoring company. Many people are able to see their credit scores on their monthly credit card statements, or through online access to their credit card accounts. The score, which ranges from 300-850, is used as a general indicator of how likely someone is to pay back a debt. A higher score makes consumers eligible for lower interest rates and more desirable loan terms, while a very poor score might make it difficult for someone to secure a loan, a credit card, even and apartment or a job.
Report shows scores make a difference
A report published by the Federal Reserve Bank of Philadelphia’s Payment Card Center, in conjunction with Barclays, which provides FICO scores to their customers for free through the Open Access program, showed that people are taking advantage of, and benefitting from, the program.
Eighty-four percent of folks enrolled in the program through Barclays are checking their FICO scores every month, and credit card utilization rates—the amount of money owed on cards—went down for cardholders with low scores. That indicates people are trying to improve their credit scores after seeing them. People who have free access to their FICO scores also have lower delinquency rates, meaning they are less likely to not pay their amounts due.
The more consumers know about their own credit health, the better it is for everyone,” said FICO’s Jim Wehmann. "Just two years ago we launched FICO Score Open Access with the holders of 8 million consumer accounts able to receive their FICO Scores for free, and today we have surpassed 100 million, thanks to the nation's lenders that share our commitment to consumer financial empowerment.”
Help is available for people who need it
FICO also offers assistance to folks who need help improving their credit. FICO Score Open Access for Credit & Financial Counseling has partnered with over 30 nonprofit credit-counseling programs. Financial counselors provide credit scores and education materials to clients, free of charge, helping them to regain secure financial footing. Low income and vulnerable populations are able to access help at places like the New York Legal Assistance Group.
“Consumers and their financial counselors can have a fruitful conversation about what these scores mean and how they can be improved to enhance a person's overall economic stability,” said Doug Ostrov, director of financial counseling at the New York Legal Assistance Group. “Our clients are eagerly attending workshops where we share FICO Scores. It provides a teaching moment, where clients see for themselves what the problems are and how, together, we can make a plan to fix them.”