Answer: It depends.
Most readers are aware that one can view their credit reports from the three credit bureaus 1X per year for free at annualcreditreport.com (and even that is changing, as Credit Karma recently announced that they would provide this information from two of the three bureaus updated weekly for FREE). However, when making yes/no credit decisions, lenders usually turn to your credit score (which is based on your credit report) in making their determination. Until recently, it cost money to get “your number,” (Note that if you are turned down for credit, the lender is required to provide the reason why along with your credit score)
Credit scores are just another example of how fast-moving the world of personal finance has become. Until recently, they came at a cost. Then a trickle of credit card providers started to provide cardholders with their score for free and now big banks are getting into the action (from USA Today):
President Obama put weight behind free credit scores when he announced earlier this month that Bank of America, Ally Financial and JPMorgan Chase would all begin to give customers their FICO score in some capacity in 2015.
Why is this increased transparency good for consumers?
- Identity theft: “Seeing your credit score with regularity gives people the opportunity to catch certain trends,” like identity theft, says Bruce McClary, spokesperson for the National Foundation for Credit Counseling.
- Creates a tighter feedback loop where consumers will start to see how their financial actions impact their scores: “Customers who are actively looking at their credit score tend to be less likely to get delinquent and in trouble with their accounts.”
Check out the NGPF’s lesson on Improving Your Credit Score!