Wells Fargo Offering Free FICO Scores to More Borrowers

By AnnaMaria Andriotis 

Wells Fargo & Co. is giving 30 million customers access to their FICO scores.

The largest mortgage lender in the country by loan volume said Monday that it is offering the score to its mortgage borrowers as well as customers with home equity lines of credit, private student loans, personal loans and certain auto loans. The bank began offering FICO scores for free in March to its credit-card customers and has since rolled out the offer to its other loan borrowers.

The bank is providing the score through a partnership with Fair Isaac Corp., the creator of the FICO scores. More than 45 lenders, including American Express, Ally Financial, and J.P. Morgan Chase, are showing customers their FICO scores for free through this program, which FICO launched in late 2013.

Discover Financial Services took this effort a step further when it began showing all consumers, not just its own customers, their FICO scores this year.

Credit-score wars have been heating up in recent years. In the wake of the recession, when most lenders cut off access to loans for borrowers with less-than-stellar credit scores, a number of comparison-shopping websites emerged offering free credit scores to consumers.

The pitch was that consumers would know where they stood on the credit-score scale before applying for a loan. But those scores were rarely FICO scores -- which are the scores most lenders use in their underwriting decisions. That led to confusion among borrowers who thought they had high enough credit scores to get approved for loans, but would end up getting rejected.

It also created a name recognition problem for FICO. As consumers were becoming more aware about the significance of credit scores, many didn't realize that there are many types of credit scores and that few outside of FICO and lenders' own private scoring models are actually used to determine whether to approve them and what interest rate to charge them.

FICO earlier this year said that its scores are available on 150 million consumer financial accounts. Depending on the lender, consumers can see their FICO score when they check their loan account online or on their paper statement.

Write to AnnaMaria Andriotis at [e-mail]

(END) Dow Jones Newswires

August 08, 2016 11:55 ET (15:55 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.