With so many “free” credit score offers being peddled these days, it’s not always easy to know which ones are legit and safe… and which ones are scams. How does CreditSesame.com measure up?
What is Credit Sesame?
Launched four years ago, Credit Sesame is a venture-capital backed website that is touted as a free consumer resource for managing credit. You register by filling out your personal information and Social Security number. Once you do that, they come back and provide some info about your creditworthiness (I’ll discuss that in a moment).
Is Credit Sesame actually free with no hidden punitive fees? Yes… You won’t have to provide your credit card number or pay anything to use the service, which is a pleasant surprise in today’s environment. But be warned because the score provided to you is NOT a real FICO score, hence the oft-used term “FAKO Score”. It is an imitation that is not used by lenders. If you want to see your authentic FICO score for free, you can do so with the following:
How Credit Sesame makes money is that they provide you sponsored offers from advertisers like mortgage lenders, credit card deals and things like that. After completing the forms on their website I was taken to a page with some basic information:
Note: The reason I blocked out the numbers is because payment amounts are actually used as security questions to verify your identity when checking your credit.
Obviously, the first thing I noticed is the credit score of 771. Is that an accurate credit score?
Because Credit Sesame does not use FICO scores!
Instead, it uses the Experian National Equivalency Score.
So you are getting an imitation FICO-like score, not the real deal. So, you must take it with a grain of salt – i.e. you get what you pay for.
The Experian National Equivalency Score runs on a 360 to 840 range, rather than the 300 to 850 range for FICO. However beyond the number differences, it’s important to remember that we are talking about two different scoring models, which means the various components are counted differently in each. Plus, while educational scores (like the Experian National Equivalency score) can be useful to get a ballpark idea of where you are creditwise and track your progress, lenders don’t use these scores. So, if you’re about to apply for a major loan, pull your FICOs.
And what else does it do?
I was actually looking forward to doing this review of Credit Sesame, because I was hoping I would discover a robust set of free tools to utilize.
However, the information they give you is limited, at best. Now in their defense, the service is free, so there isn’t much reason to complain – like I said, you get what you pay for in this world. But, I don’t think this would be of great use if I was serious about managing my credit and here’s why…
Unless you pay $9.95 a month for the “Advanced” service, you’re left with the bare minimum when it comes to credit analysis. Here’s what the site gave me, as far as credit analysis goes:
That’s interesting, but it’s hardly informative or truly useful. You can see your credit utilization ratio in a bit more detail by clicking the “Credit Usage” tab:
Credit Sesame offers a monthly Experian credit report — but only if you’ve bought the $9.95/month Advanced package. Credit Karma’s free service, meanwhile lets you zoom in on your credit way more, allowing you to view the number of inquiries on your report and the length of your credit history. It also gives you the ability to simulate the effect of future actions on your credit, which is pretty cool in case you’re considering applying for several credit cards at once or plan to buy a house in the future. Capital One’s Credit Tracker has similar features.
And the final conclusion?
Is Credit Sesame really free? Yes, and for that reason my complaints are all relative. Since you are not spending any money, Credit Sesame is safe – it’s definitely not a scam or rip-off, since you’re not spending a dime.
But is it actually useful and worth the effort? That’s the question to consider.
If you have no absolutely clue about your credit quality – then this service could potentially be a useful way to check for free where you generally potentially fall on the credit quality spectrum. Plus, because Credit Karma and Capital One’s Credit Tracker both use TransUnion, Credit Sesame is a good way to see how Experian is ranking you. Each bureau is a little bit different so there is some value in getting some insight into that dimension.
However, it’s not as detailed as the other free credit scoring services out there. And if you want to know your true FICO score, Credit Sesame falls short — as do all free credit scoring services. So, unless they make their basic service more robust you would probably be better off getting your real credit score each month from some of the card issuers that now include it for free from issuers like Discover Card or Barclaycard on their monthly billing statements. To me, this is the best way to get real scores nowadays and probably renders services like Karma obsolete (or at least they are becoming at best redundant and unnecessary, if not obsolete). Plus, with monthly reporting you can see how your spending and other financial habits impact your FICO score over time.
Updated November 3, 2015.