HOME mortgage and credit industry experts say it could be the start of something big: lenders providing free, round-the-clock access to your credit score, plus practical advice on how to improve it.
Providian Financial Corp., a large San Francisco-based credit card issuer, plans to give its customers unlimited views of their credit scores, whenever they choose, at no charge. The service also will provide the two top reasons the scores are not higher, plus calculations of how credit-related steps could raise - or depress - the score.
On top of that, cardholders will be able to sign up for free automatic e-mail alerts any time their scores move by more than 10 points, a key early warning defense against identity theft credit crimes.
Providian has begun the credit service for new VISA customers and soon will extend it to its 10.5 million cardholders. The program supplies the most widely used form of score, FICO, computed from monthly credit file data at Trans Union, one of the three national credit repositories.
Providian says its objective is to demystify credit scores by making them accessible at any time at no direct cost to the consumer. Not surprisingly, it also hopes to pull in large numbers of new credit card accounts and gain market share.
What's especially significant about Providian's concept is that other lenders, mortgage servicing companies and banks are virtually certain to jump in with competing programs.
Most big mortgage companies and banks periodically check their customers' credit scores as part of their routine quality control and auditing practices. Score movements help them gauge the default potentials of their home mortgage borrowers and other accounts. But they never show the scores to the people most vitally affected by them, their customers.
Providian Senior Vice President Alan Elias says that's not the way it should be. Keeping scores secret needlessly keeps borrowers in the dark about a critically important aspect of their financial situations.
On a cost basis, he says, Providian's new service is an easy choice.
"We already buy these scores once a month anyway," Elias said. "We have them. Why not share them with our customers?"
"What a great idea," said Terry Clemans, executive director of the National Credit Reporting Association, which represents independent credit reporting agencies. "Every company that pulls scores for quality control audits ought to do something like this."
Mortgage servicing firms in particular, said Clemans, order millions of scores on homeowners a year, often in quarterly batches. Such high-volume, wholesale purchase contracts cut the price of credit data far below what consumers have to pay retail, an estimated 30 cents to 40 cents for the biggest corporate users vs. the $12.95 or more that a homeowner might pay for a credit report and FICO score.
Could some big banking companies be planning programs offering free access to credit scores using bulk-cost credit data similar to Providian's? The answer appears to be yes.
Scott Mitic, a vice president with Fair Isaac & Co, developer of the FICO score technology, declined to identify any companies but confirmed that other large financial institutions might start their versions of score-access services in the months ahead.
That's excellent news for potential homebuyers, because knowing your FICO score - and how to improve it - are two keys to successful home buying and mortgage borrowing.
High FICO scores give you access to the lowest interest rates and fees, not only on your mortgage, but also on your car loan, credit cards and most other forms of borrowing. Low FICO scores, by contrast, cost you big bucks on everything from home equity loans to hazard insurance and auto insurance.
FICO scores are used by apartment screeners to evaluate tenant applications. Many employers also order them on potential hires. Yet, despite their widespread use and importance, research surveys show that the vast majority of consumers have no idea about their scores.
Those who do frequently pay a price, buying their scores online, along with their credit reports, at the repositories' Web sites or from Fair Isaac's site, MyFico.com.
Congress passed legislation last year giving all consumers the right to request and receive one free credit report per year from the three national repositories, Equifax (www.equifax. com), Experian (www.experian. com) and Trans Union (www.transunion.com). The legislation does not require free annual credit scores, however, and the earliest free credit reports are not expected to be available until late this year.
But maybe lenders will fill the void and allow homebuyers to shop smart, with their scores in hand.
Ken Harney's e-mail address is email@example.com.