Consumers WiIl Have Access to FICO Scores

DAILY REAL ESTATE NEWS | TUESDAY, JANUARY 13, 2015 

Bank of America and J.P. Morgan Chase, two of the largest lenders in the U.S., have agreed to start showing some of their borrowers their FICO scores for free. FICO scores are a key metric lenders use to decide who to lend to and what interest rate to charge.

President Barack Obama announced the move on Monday at the Federal Trade Commission, emphasizing the importance of making these "once-secretive scores" more transparent to millions of consumers. In February 2014, the Consumer Financial Protection Bureau called on large credit-card lenders to make credit scores more available to consumers. CFPB says it received complaints from consumers who couldn't access their credit score.

FICO scores are used in about 90 percent of consumer-lending decisions, according to financial services research firm CEB TowerGroup. Consumers can purchase some of their scores, but everyone has several FICO scores — and they can't necessarily see the one the lender is using.

By knowing their credit score, consumers can take steps to improve it over time, which may result in greater loan savings and making credit more available to them, financial experts note.

Bank of America says that it will begin providing its consumer credit-card users with their FICO score later this year. Ally Financial plans to offer car-loan customers their score in February and roll it out to all customers in the summer. Chase plans to offer FICO credit scores at no charge to the roughly 10 million users of its "Slate" credit card.

FICO, through its growing list of partnerships, told The Wall Street Journal that it expects nearly 60 million consumers in the U.S. to soon have access to their FICO scores.

Source: “Millions More to See Their FICO Scores,” The Wall Street Journal (Jan. 12, 2015)