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How accurate is my free credit score? Be wary of apps like Credit Karma, a new report warns

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01.10.2021

Americans pretty much everywhere agree that this country’s credit-reporting system is essentially impenetrable. In a bid to help, almost two decades ago, Congress declared consumers have the right to receive one free copy of their credit reports each year (via AnnualCreditReport.com). But what we don’t have the right to see are the actual scores derived from those reports—it’s the equivalent of getting our homework passed back without a grade at the top.

Those reports are compiled by the three major credit bureaus—Experian, TransUnion, and Equifax. But credit scores are calculated by a different set of companies, using models that each claims makes theirs better. An entire industry has emerged to try to bridge this gap, full of companies promising not only to give consumers access to the scores lenders rely on, but also to kick in personalized financial advice that will help raise those scores.

However, a new review of these services by Consumer Reports suggests otherwise. Looking at five of the biggest apps that provide this service (Credit Karma, Experian Credit Report, Credit Sesame, myFICO, and TransUnion: Score & Report), the report argues that the scores they give you aren’t terribly useful—and, worse, that many of them routinely solicit customers to apply for additional credit or buy new financial services that, as Consumer Reports puts it, “are........

© Fast Company


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