Discover credit card holders now get to see their FICO credit scores every month on their credit card statements.
The credit card issuer said Monday that each statement will provide a TransUnion FICO credit score along with a meter that shows how the score stacks up to other scores. By the end of January, those consumers with a Discover "it" card will receive factors that affect their credit score, says Discover spokeswoman Laura Gingiss.
The scores are one of the factors Discover uses periodically to determine if card terms should be changed to match the consumer's changing creditworthiness, such as an increase or decrease in interest rate or a reduction or expansion of the limit. FICO credit scores estimate a consumer's likelihood of default over the next two years. Lenders use these scores to help set interest rates and decide whether to approve a borrower.
Discover is the third U.S. credit card issuer to take advantage of FICO's open access program that discloses credit scores. Earlier this month, Barclaycard and First National Bank of Omaha started participating in the program. The program is open to all U.S. issuers, but Barclaycard, First National Bank and Discover are the only ones so far taking advantage of it, according to FICO spokesman Anthony Sprauve.
"This is important for consumers because they are seeing the exact same FICO Score their lender is using to manage their account," says Sprauve. "And over time, they will have a history of their score."
Sprauve says that 56 percent of Americans don't know their credit score, according to a recent survey by the American Bankers Association. He also noted that the open access program will reach 35 million U.S. consumers, more than twice the 16 million Americans who get their free annual credit report from AnnualCreditReport.com.
Are you getting a free credit score? If so, does it help you better understand your creditworthiness?
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