That used to be the mantra, but it's changing.
From banks to auto lenders to personal finance websites, there are places where you can get your credit score for free. A growing number of banks, auto lenders, credit card companies and consumer sites are providing consumers with free access to their credit scores.
"If your goal is to get a credit score, you don't have to pay for something to get it," said
The shift toward free credit scores comes as many consumers are focusing on shoring up their personal finances, say consumer experts.
"Because of the recession, because of the mortgage crisis, a lot of people realize they need to take ownership of their financial well-being, rather than rely on their banker or lender to take care of them," said
He said FICO, as part of its "open access" partnerships launched in November, is rolling out agreements with a number of lenders and others to give customers regular, free access to their credit scores. This fall, for instance,
And some personal finance sites, like Bankrate.com, Credit.com and CreditKarma.com, also offer free credit scores or estimators that are close to an actual FICO score.
"Helping people understand their FICO score is the foundation of their financial house," said Sprauve, who said seeing monthly changes in their credit scores can help consumers adjust their financial behavior.
Also this fall, he said, FICO is announcing "significant improvements" in how its credit scores are compiled based on five rating factors: payment history, amount owed, types of credit used, length of credit history and new credit. The goal is to fine-tune the FICO score to more accurately enable lenders and others to gauge a consumer's ability to repay debt, Sprauve said.
What's so important about a credit score? It's the three-digit number -- between 300 and 850 -- that determines what you'll pay on credit cards, auto loans, mortgages and other forms of credit.
Generally, "anything above 700 is good; you'll get good rates (on loans and credit cards)," said Sprauve.
But don't go overboard. "People obsess about their credit scores," said McBride. "They focus on minutiae, things that can be inconsequential," like whether they should close a particular card card account or not.
In general, the essence of maintaining a good credit score is simple: Pay your bills on time. Pay down debt. "That's two-thirds of your credit score right there," said McBride.
Most Americans, he noted, have decent credit scores. What they don't have is a financial cushion. "The focus should be on having an adequate emergency savings," ideally six months of living expenses. "You gotta pay yourself first, there's no app for that." Set up direct deposit from your paycheck into a dedicated savings account. Take a "long, hard look" at expenses to find opportunities to cut back. Find ways to boost income, such as freelancing or extra odd jobs.
As Americans continue recovering from the recession, there's perhaps more awareness of financial well-being.
"Overall, consumers understand they need to know their own financial situation better, to ask more questions and not blindly follow what a lender is telling them to do," said Sprauve. "There's a whole push for consumer awareness and empowerment around personal finance."
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