Here’s the REAL Reason You Don’t Get a Free Credit Score Annually…

Credit ReportAsk yourself this question…Are credit scores part of my credit report? 

And I’ll answer it with this…the difference between a credit report and a credit score is;

A credit report is credit information compiled by the three U.S. credit bureaus – Equifax, Experian and TransUnion. There are four key components of the credit report: 1) personal information, 2) inquiries, 3) account information and 4) collections and public records. Most of the information is supplied by lenders, collections agencies and public records such as tax liens, civil judgments and suits. Lenders include credit card issuers, mortgage, student loan, vehicles, banks, credit unions, and finance companies.

Credit scores

There is no chicken versus the egg issue regarding credit reports and credit scores – the reports came first.  Credit scores are derived from information on your credit report. Advanced statistical techniques and analysis are used to determine the correlation between the credit data and credit behavior such as the potential to pay bills late 90 days or more in the next two years. A credit score is usually three digits and is a summary of your credit report representing your creditworthiness.

Score not stored

Since the data on your credit report can change as often as it is updated, the score is not stored on your credit report.   It is calculated each time it is requested.  There many factors that can change your score such as: the amount you owe on your credit cards compared to your credit limit; late payments; improvement to paying on time; negative information such as charge-offs and collections; and applications for new credit.  The same score is not stored or provided to another company requesting credit information.  Each request or inquiry by a company prompts the score to be calculated again based upon the credit report at that point in time.

You can receive your credit report free annually from each of the three credit bureaus per the Fair Credit Reporting Act-, but it doesn’t give you your credit score for free.  There are many companies which have developed a consumer version of credit scores, but are not sold to credit grantors. Some of these scores are offered for free and can be used to give you an idea of your credit score, but aren’t the same score. The FICO score, which is used by a majority of the lenders, is not free.  The version based upon Equifax and TransUnion data are available for sale at

Also, read >  Where can I get REALLY free credit reports, credit scores and credit services?

A credit score is not a permanent part of your credit report!  That’s why it’s not part of the free credit reports you can get annually thanks to the FACT Act.

JRU on 60 Mins SetCredit Reporting Expert, John Ulzheimer, is the President of Consumer Education at, the credit blogger for, founder of and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and, John is the only recognized credit expert who actually comes from the credit industry.  You can follow John on Twitter here.