You probably know that maintaining a good credit score and clean credit reports are key to your overall financial well-being.
MyFICO is a service that lets you keep tabs on your score and reports — for a fee. It’s run by the Fair Isaac Corporation, which calculates credit scores that it says are used by 90% of top lenders in the U.S. when they’re making decisions about whether or not to extend credit.
The question is: With so many other credit-monitoring options out there, do you really need to pay MyFICO between $20 and $40 a month to stay on top of your credit? Money expert Clark Howard doesn’t think so.
Why you shouldn’t shell out big bucks to track your credit
MyFICO says they “[make] it easy to manage your credit with FICO Scores, credit reports and alerts from all 3 bureaus” and “[help] you apply for loans with confidence and avoid surprises.”
But all of this comes with some pretty hefty fees.
As you can see, myFICO memberships range from just under $20 a month for access to your credit score from one bureau (Experian) up to basically $40 a month to get your scores from all three major credit bureaus (Experian, Equifax and TransUnion).
But Clark says there are other ways to stay on top of your credit without putting a big dent in your wallet.
“No one should ever pay for credit monitoring,” he says. “If you want credit monitoring, do it for free. There are so many places where free services are now available.”
Free alternatives to myFICO for credit monitoring
Credit Karma is a favorite of Team Clark for monitoring your credit, offering to let you “Check your scores anytime, anywhere, and never pay for it.”
Credit Karma lets you access your credit scores and reports from both Equifax and TransUnion, and is updated weekly. They make money by recommending products and services to you based on your credit profiles. If you choose to sign up for one of those products, they get a referral fee from the bank or lender.
One of the best things about Credit Karma is their ongoing credit monitoring service. If anything significant changes on your TransUnion report, they will send you an alert so you can make sure it was something initiated or authorized by you and not someone committing credit fraud.
Credit Sesame works much the same way, though the information it provides is limited to TransUnion. Like Credit Karma, Credit Sesame offers to monitor your credit for free, sending you alerts whenever there are big changes to your credit report and score.
Your credit card
Many credit card issuers will show you your FICO score for free as a perk of carrying one of their cards. Those issuers include:
- American Express
- Bank of America
- Chase (some cardholders)
- Citi (some cardholders)
- Wells Fargo (some cardholders)
Finally, you should know that by law every American has the ability to access their credit reports from all three bureaus for free once per year at Annual CreditReport.com.
This service can be invaluable if you are thinking of applying for a loan for a house or car, as you can see exactly what potential lenders will see when they pull your credit. You can also dispute anything on your reports that doesn’t look right.
Clark recommends that everyone take advantage of this free service once per year to make sure everything appears to be on the up and up. One thing to note is that these reports will not include a score, but you can get that from one of the other sources above.
Though you may see advertisements or other recommendations for myFICO that make it seem like it’s the only way to really stay on top of your credit, it’s important to know that there are other free options. If you take advantage of those, you save hundreds of dollars over using the paid service.
Finally, if you haven’t already frozen your credit, Clark wants you to take a few minutes to do that now. It’s the #1 way to keep crooks from stealing your identity and ruining your credit.