If you’ve ever bought your “free” credit report online, chances are you’ve been deceived by the credit reporting agency who sold it to you. Like a magician pulling a rabbit out of a hat, these credit agencies make up a score and sell it to you.
Of course, there’s a mathematical formula behind the score they sell but the number you receive bears no relationship to the real number the exact same credit reporting agency will sell to actual and prospective creditors.
What does this mean to you in the real world?
Let’s say that you buy your credit score online and the number you get is a 680. The number sold to a credit card company, an auto dealer, a prospective mortgage lender, or even a potential landlord might actually be in the 500s. That’s the difference between getting a decent rate on a loan and not even qualifying for one!
Like 3-card monte, you’re being played by credit reporting agencies.
The real number that you want to look at is your FICO score, but as explained by Aleksandra Todorova in Not All Credit Scores Created Equal, even your FICO score can vary depending upon the type of creditor buying the information.
Quite frankly, it is amazing that the U.S. Federal Trade Commission (FTC) hasn’t stepped in and made these clowns actually report your real FICO number, including any variations of it so that you know what you’re dealing with the next time you apply for credit.
In fact, if you’ve been deceived when buying your credit report online, be sure to file a complaint with the FTC about it.