Discover, who was one of the first credit card companies to offer free credit scores to its cardholders, is now offering that service to all U.S. consumers, regardless of whether they have a Discover card.
"Credit scores play an important role in many of life's big moments, like buying a home or a car, taking out a student loan, even renting an apartment," said Roger Hochschild, Discover's president and chief operating officer, in a statement.
The score Discover provides is FICO Score 8, which is the credit score version lenders most often use to determine creditworthiness. FICO says on its website that Score 8 is a more predictive score that weighs the credit cards you use most often more heavily than your other cards. It also ignores what it calls "nuisance" collection accounts that are balances under $100 that are in collection.
I decided to see for myself how easy the new tool is to use, because even though I have a Discover card, I haven't been able to take advantage of the service because I'm an authorized user on my husband's account, and when it was first offered, the service didn't extend to me.
Registering at discover.com/creditscorecard is a multi-screen process, where you give basic information like name, address and social security number and create an account. You also need to answer questions that help verify who you are, much like when you order a credit report. Finally, you create a security question and you're registered.
The first time I tried to register, I didn't get past the first screen in the process. I'd inputted my information and created a strong password, but when I tried to continue to the next screen, I got an apology screen saying there was an error on their end.
A couple of hours later, I tried again and had no trouble setting up an account and getting my credit score.
The tool is pretty handy and provides not just your credit score, but shows the factors that go into creating that number and how your financial behavior is affecting that score. At a glance, it tells you your score, the rating your score has--exceptional, very good, good, fair or poor--and what's helping or hurting your score. For example, I have no missed payments, which improves my credit score.
Beyond providing that top-level information, Discover then goes into the five factors that help determine your score. Credit mix, which is the number and types of credit you have, accounts for ten percent of your FICO Credit Score. The length of credit history counts for 15 percent. How often you're seeking new credit and are asking companies to inquire about your credit history is another ten percent of the score.
The last two categories factor more into your credit score. The first looks at your credit utilization, and this figure factors into 30 percent of your score. Credit utilization is a percentage of how much debt you're using versus how much possible debt you could have in all of your revolving accounts--these are the type where you can carry a balance from month to month. The scorecard lists this calculation as both a percentage, which is what FICO looks at, and an actual dollar amount.
Finally, and most important to your credit score is your payment history, which is 35 percent of your credit score. FICO looks at how many times in the last year you've made a late payment, and it also looks at how many accounts have reported you making late payments in the last seven years.
You can download your scorecard into a handy one-page PDF file. Once you've checked your score, Discover will refresh it in 30 days.
One condition of registering is that Discover will use your information as a way to market more products to you--and it will share some, but not all, of the information it collects with affiliates and non-affiliates who market or service Discover products. I'll be curious to see how much junk mail this creates. For now, though, this is a pretty handy service that will help arm me with information should I need to obtain more credit or a loan to make a major purchase.
