If you are a consumer in the market for a truly free credit score with no credit card then CreditSesame.com might be ideal for you.
That was the situation I found myself in, in early 2010, as my wife and I were looking to buy our first home. At the time, their program helped tremendously with getting my head around credit worthiness and understanding why we were initially not getting good terms from our lender.
Since 2010, I can say that I no longer rely on Credit Sesame for my credit score history because at times it was not completely accurate, more of a guesstimate (technically called the Experian National Equivalency Score), and it also burned me because it over estimated my score as 809 when I finally applied for our mortgage.
The lender was quick to give me a reality check, educate me on the Fico scoring model(s) about how you really do not have just a single score, and show my score was actually 719 . Now each bank or mortgage provided has their own specific method of calculating your score and unfortunately for me, the score I relied on was just a representation of my Experian score.
A quick update on the score variance. I’ve subsequently seen a few different sites showing that the average difference is 21 points from their equivalency score and your real Experian credit score. If you keep that type of plus or minus in mind when you see their number, you can get a better idea of your credit worth. Of course, in my case it was closer to 100 points off but apparently that isn’t the case for most consumers.
With that said, if you are are in a similar situation as a first time home buyer or just beginning to establish credit, the program is worthwhile and can make a big difference in your future financial goals but keep in mind the limitations of the program.
Safety & Security Features
First and foremost, as a previous victim of identity theft, my big concern was whether or not my personal information would be safe online. This was an easy issue for the Sesame program to address as they have Bank level encryption coding, use the VeriSign network and you can opt out of the Credit Sesame app for your smartphone. Security is nothing to take light (Hello Target Stores!) so if you decide to go with another credit score program, make sure it is safe and legit.
Ok, so what is the catch?
We all know about “free” services that lure you in with a trial period and then hit you on the back later with monthly charges that you may have forgot to cancel. Certainly nothing free about those, but the CreditSesame.com service is free. I repeat, it is free.
They are able to do this by partnering with lending services, debt repair companies and credit card companies. These businesses pay them for applicants from there website, a form of prequalified lead generation. So, when you log-in to the service you will see subtle offers and pushes to apply for a new loan or open up a new charge card. Maybe if the program determines you could use a 0% transfer offer, you would see advertisements for a new credit card with 12 months same as cash on transfers.
No harm in that, as the education they are providing is well worth it and they are open about how they get paid.
The Service Goes Beyond Your Credit Score
They offer many useful finance tools online, one of my favorite cool tools is their ‘Save Money’ utility. This tool audits your finances to look for any red flags or weak links in your history. With their access to thousands of consumers data, they can quickly find outliers and make recommendations based on the ‘normal’ values.
My wife found this particularly useful as she was able to consolidate and lower her student loan interest by 0.375%, which for your college grads out there understand can be thousands over the repayment cycle. In all due fairness, this is great for a no fee service and we are still saving money each month as a result of this “recommendation”.
Another useful feature is their version of a credit alert or free credit monitoring. The catch here is that you have to login daily to see the reports, in lieu of getting a real time text, email or robocall when any changes are found in your credit history.
Shortcomings Of The Program
My biggest gripe is one that you will find quickly in any online reviews for CreditSesame.com. Basically, most of their data is pulled from Experian and is only updated when something changes on your credit report. This information gets stale quickly and so a lot of their recommendations were based on invalid data. Again, for a free service this isn’t a deal killer but now that I have a up-to-minute paid service with credit alerts, I could not imagine going back and having to make those calculations in my head each time I considered their “suggestion”.
Competition For Your ‘Free’ Score Service
The market leader for ‘free’ guesstimate scores is Credit Karma from the TransUnion credit bureau. Suffice to say, it still garners the most attention from consumers as it has been around the longest and has proven to be a nice tool. I decided not to try it after when I signed up for CreditSesame.com because Credit Karma required my social security number to register. At the time, the Sesame site did not require my SSN (a few users have reported this changed in early 2012) and that made it a safer bet for me.
Now I use a pay service for checking my credit reports each month. After my experience getting burned on my mortgage application from relying on a ‘guesstimate’ score, I wanted to ensure that what I was basing my financial decisions off of was going to be accurate. Paid services may not be necessary for credit virgins, but for more seasoned consumers, I would recommend a fee based credit monitoring service.