Credit Sesame Addresses the Confusion: What Credit Score We Use

Interested consumers ask a few common questions about who we are and what we do. Here are the answers you need.

Credit Sesame, a financial wellness company, is a consumer advocate. We provide credit scores, updated monthly, absolutely free to any U.S. consumer who has a credit file. Credit Sesame also provides services to help consumers make better financial decisions.

We offer free credit scores to empower consumers to do two things:

  • Choose the credit products with the best terms
  • Take specific steps to improve credit standing in order to save even more money in the future

Did Credit Sesame mislead consumers?

cs_1

No. In early 2017, the Consumer Financial Protection Bureau (CFPB) ordered TransUnion and Equifax to pay big fines for deceiving customers about credit scores and credit reports. The CFPB says that TransUnion and Equifax told customers that they were purchasing the “same score lenders use to make credit decisions” when in fact they were not. Also, those companies lured consumers into free or $1 trial memberships without clearly disclosing that the memberships converted to monthly subscriptions that were automatically billed to the customers’ credit cards.

Credit Sesame was not part of that order or any other order in history. We have always offered members their “consumer” or “educational” score. In addition, no credit card number is required to sign up, so there is absolutely no risk of discovering surprise fees or charges for our service. Payment is only required when you choose to purchase a premium service.

Image Source | www.creditsesame.com

Image Source | www.creditsesame.com

In addition to free credit scores, Credit Sesame members get free credit monitoring (including real-time alerts to credit file changes), a free credit report card (including analysis and actionable tips for improvement), and free identity theft protection (including live identity restoration support and $50,000 in free identity theft insurance).

Premium services are available to consumers who want to purchase them. Pro and Platinum Protection plans include daily monitoring of your information on file with all three major credit bureaus (Equifax, Experian and TransUnion) and $1 million of identity theft insurance. Our Basic plan includes daily monitoring of your TransUnion credit report. For Platinum Protection members, we also monitor your Social Security number, public records and black market websites. All of our paid plans include 24/7 support for dealing with credit reporting inaccuracies.

What credit score does Credit Sesame use?

Image Source | www.creditsesame.com

Image Source | www.creditsesame.com

The credit score you see on Credit Sesame is based on the VantageScore® 3.0 scoring model and provided by TransUnion. It is a real credit score, and it is not the TransUnion Risk Score, which is a score that was merely an educational credit score and not used by lenders. The TransUnion Risk Score was designed by TransUnion to give a user an idea of what their credit score was.

Details About the VantageScore® 3.0 Scoring Model

VantageScore® 3.0 is a credit score that was designed by the three credit bureaus as an alternative to other commercially used scores such as FICO scoring models and, according to Vantage, is commercially used by over 2,400 lenders and 20 of the top 25 financial institutions for various purposes. VantageScore® 3.0 is an entirely different scoring model than FICO but it is scored on the same scoring range of 300-850, which is what consumers are familiar with.
It is a myth that there is only one credit score that lenders use.  There are actually many different credit scoring models. In fact, it’s a myth that you only have one FICO score because FICO has many different scoring models that could all generate a different numerical value as your score.
Many of the different FICO scores have industry-specific uses, like mortgage, credit cards or auto loans.

So Many Different Scores Can Be Confusing, but Here’s What You Should Do

Because there are so many different credit scores and because consumers have no way of knowing what scoring model that a lender is going to use, you can use theVantageScore® 3.0 score as a benchmark to measure whether the score is going up (improving) or going down (getting worse).
It’s likely that improvement that you see in one credit scoring model could mean improvement in other scoring models because almost all scoring models look at the same five aspects of your credit: payment history, credit utilization, credit age, credit mix and recent credit.

Hot tip: The credit score you see on Credit Sesame may differ from the score a lender sees when you apply for credit. This is normal. You don’t just have one credit score; you have dozens. There is no one score that lenders use. In fact, you even have more than one FICO® score.

A mortgage lender sees one version of your score but a credit card issuer sees another, even if both scores are viewed at the same moment. Auto lenders and certain other types of creditors also have access to special industry-specific scores. Furthermore, although credit scoring systems are periodically updated, lenders are not required to use the most current version, so even two lenders in the same class might receive two different scores on the same day.

You can read more about credit score differences in our Credit Score Range Guide.

If you have access to a free credit score from other sources, like your bank or credit card issuer, we encourage you to review those, in addition to the free credit score provided by Credit Sesame. Keeping tabs on your credit score and credit report card can tell you whether your credit profile is improving, what general range you fall into, and even if you’ve become the victim of fraud or credit reporting errors when your score unexpectedly falls.

Does Credit Sesame provide free annual credit reports?

Image Source | www.creditsesame.com

Image Source | www.creditsesame.com

The only online source authorized to provide your free credit report, to which you are entitled by Federal law, from Equifax, Experian and TransUnion each year is AnnualCreditReport.com. The law does not entitle you to a free credit score, and you will not get one at that website.

Credit Sesame offers a free credit report card based on the data in your TransUnion credit file. Credit Sesame’s free credit report card assigns a grade (A through F) to your performance in each of the major areas that affect your score (no matter which scoring model is used). They are payment history, debt utilization, file age, credit mix and inquiries or new accounts.

One person’s score might be low because of late payments while another person’s score might be low because of high debt. You need to know what your contributing factors are in order to take appropriate action to improve, and our free credit report card can help you devise a plan of action.

How does Credit Sesame make money?

Credit Sesame uses sophisticated tools to analyze consumer data provided by TransUnion in order to show you how you can save money. We make suggestions that are tailored to your unique credit profile. For example, if the data show that you are likely to qualify for a credit card with a lower APR than what you currently pay, we will show that information to you.

Then, if you choose to apply for a credit product via the Credit Sesame dashboard and the application is ultimately approved, we earn a small commission from the financial institution. There is never a fee to the consumer.

You can trust that we maintain strict editorial integrity in our writing and assessments; however, we receive compensation when you click on links to products from our partners and get approved.
Published February 28, 2017 Updated: March 22, 2017
Related Links

Leave Your Reply

Submitting comment...