Why credit score apps aren’t great (and what to use instead)

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Credit score apps are a popular way to track credit scores, but they’re actually not that great. Aaccording to recent Analysis of consumption reports, these applications use different scores from those lenders actually use, they scratch off an unnecessary amount of personal information, and they sell you credit monitoring information you can already get it for free.

What you need to know about popular credit score apps

Consumer Reports looked at five popular apps – Credit Karma, Credit Sesame, Experian Credit Report, myFICO, and TransUnion: Score & Report – and found that:

  • Four in five provide users with credit scores that differ from what lenders actually use to assess consumer creditworthiness (Credit Karma, Credit Sesame, Experian Credit Report, and TransUnion: Score & Report).
  • Four in five often charge users for access to their credit reports, information that consumers are legally entitled to receive for free (Credit Sesame, Experian Credit Report, myFICO, and TransUnion: Score & Report).
  • All five appear to collect more personal data from users than what apps need to perform their primary functions, and all appear to share data beyond the parties named in their privacy policies.

How credit scores used in apps differ from those used by lenders

The free version of these credit score apps tends to only offer one credit score, although there are dozens of versions available. In the case of the apps studied by Consumer Reports, three of the apps use VantageScore credit scores rather than FICO ratings, which are used in 90% of all loan decisions. MyFICO Is offer a range of FICO scores used by lenders, but you have to spend $ 20 per months to access it. Experian Credit Report provides the most commonly used FICO 8 score for free, but to access other FICO scores they charge you $ 20 per month.

However, all of this information may be of limited value. Of course, you could pay to research some of the dozens of credit scores available, but that won’t necessarily tell you what a lender might use to determine your creditworthiness. (There are dozens of FICO scores used for various purposes, like mortgages or auto loans.)

If you’re worried about your credit rating going down, it may be easier to focus on good credit behavior while keeping an eye on your credit reports from major bureaus Equifax, TransUnion, and Experian, on which these credit scores are based. After all, a credit score only gives you a three-digit number, it doesn’t tell you Why your credit score has changed.

Even the free versions of these apps have tradeoffs

To use the free version of these apps, you still need to allow these companies to collect your personal data, including data from other sources outside of the app. According to Consumer Reports, this allows these companies to create a profile on where you live, work, socialize, and shop. For example, Credit Karma’s data collection policy includes information from “local business journals or social media messages ”, and the MyFICO agreement grants them permission to access“ census data or real estate records ”.

Additionally, these apps will also try to sell you paid subscriptions or other financial products that Consumer Reports describes as “not necessarily in the best interests of users,” such as credit reports that you can already get for free.

Where to get your free credit scores and reports

Many banks or credit card companies already provide FICO scores on their sites or apps. You are also entitled to a free annual credit report from each credit bureau, which can be found on this site. (DDuring the pandemic, these rules were relaxed: UUntil April 2022, you can get one report from each office every week for free.) Otherwise, the best way to protect your credit score is to adopt good credit behavior. For more information, see this Lifehacker post.

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