17
Dec

Receiving a credit score may become a lot simpler for consumers as several credit providers will be providing free options in order to see their FICO credit scores.

A consumer is allowed one free credit report every 12 months from each of the three major credit bureaus, Equifax, Experian and TransUnion. A credit report allows users to see their credit score, which is a three-digit number that assesses the accountability of a consumer. Usually once someone has gotten their free reports, they will have to pay for a new one, but several credit providers are staring a new trend that would allow users to see their scores for free.

Starting a new trend
Crain's Chicago Business reported that Discover, Barclayard US and First Bankcard are three credit card issuers that will provide a FICO score, one of the most widely used credit score providers, for no additional charge. Crain's went on to say that the three companies have signed up 35 million cardholders to check their score every month for free. Discover Senior Vice President of Brand and Acquisition Julie Loeger said in a statement that this new feature will allow borrowers to stay on top of their finances.

"By providing cardmembers with their free FICO Score on their monthly statements, we're helping them manage their finances so they can achieve their personal goals," Loeger said. "A good credit history and FICO Score can be a deciding factor in a person's ability to get a loan or receive a good rate that will enable them to buy anything from everyday purchases to a new home. We think Discover customers deserve to have ready access to this information and should not have to go through hurdles to get it."

Credit scores are one of the most important components for a lender to look at when approving a loan or opening a new line of credit.

Keep a watchful eye on finances
Discover said its cardmembers​' FICO scores will be available on each bank statement along with educational material to help the cardholder better understand what their score means. The company is doing this in order to help customers keep a watchful eye on their finances, which surprisingly many are not doing. The Illinois-based credit card company conducted a survey and found that 40 percent of Americans have not checked their score over the last year. FICO Executive Vice President of Scores James Wehmann said he is hoping that having a score readily available for consumers will aid them in maintaining a healthy state of credit.

"The FICO Score is one of the most commonly used credit evaluation measures, providing consumers with critical information that many lenders use to make credit decisions," Wehmann said in a statement. "We applaud Discover for participating in the FICO Score Open Access program and continuing to be a leader in consumer financial education and empowerment."

Ways to check score
Although Discover is allowing cardholders to see their score on a bank statement, Barclaycard and First Bankcard are trying something different. Crain's said borrowers from these two companies will have to simply log into the company's websites in order to view their scores.

Barclaycard said that 80 percent of its 8 million credit card users will be able to access their FICO scores by December with the rest getting access in the early part of 2014. Crain's reported 80,000 First Bankcard borrowers can already see their scores and the other 2.5 million cardholders will have this option over the course of the next few months.

Experts have applauded this action from credit card companies as a way for their clients to keep track of how they use their credit. Blue Ocean Strategic Capital CPA and financial planner Ted Sarenski told Crain's that this move will pay dividends and help educate more consumers.