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 back in 2010, they’re a venture-capital backed website that is touted as a free tool 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 really free? Yep… You won’t have to provide your credit card number or pay anything to use the service. But be warned because the score provided to you is NOT a real FICO 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 two cards:How Credit Sesame makes money is that they provide you sponsored offers for mortgage refinancing, credit cards, loans, etc. After filling out 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 accurate or not?
Because Credit Sesame does not use FICO scores!
The homepage was silent on the matter, but after creating an account the sidebar has an FAQ which blatantly tells us a “different scoring model” is being used.
It doesn’t specify which model is being used but a quick hop over to Wikipedia answers that question for me: Experian National Equivalency Score
So you are getting an imitator to FICO, not the real thing. My guess is this is what largely makes it possible for the Credit Sesame service to be free, because the FICO formula costs money to license (one can presume this imitating model is much cheaper for them to license).
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.
In short, you can’t compare the two as apples to apples.
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 tool chest of free tools to use.
But instead, I was left a bit disappointed.
The information they give you is very limited. Now in their defense it is free, so I suppose I shouldn’t complain. But I don’t think this would help me much with managing my credit and here’s why…
When I click on the “My CreditWorthiness” tab, it presents a screen giving me 4 “key factors” that are impacting my score:
1. Number of Credit Inquiries
It shows me that, but tell me something I don’t already know? What I would like to see here is the number of inquiries, not a definition of what credit inquiries are.
2. Amount Owed on Mortgages or Lack of Mortgages
I have no complaints on this factor. I live in an apartment and therefore lack a mortgage, so I know that’s not the best for my credit score. There’s not much more for them to say about this.
3. Amounts Owed on Credit Cards
Now this one I got a chuckle out of. As you see in the highlighted text, it says I may be close to maxing out my credit cards. That’s funny considering that in a different section, they show a pie chart stating my credit usage is 3%.
So which one is it… 3% credit utilization or I “may” be close to maxing out?
For the record, I have dozens of cards and in any given month I may use 4 or 5 of them, depending on the rewards programs which suit my needs. They are always paid in full every month and during any given month, the utilization on a single account typically will never exceed 15-20% between the billing cycles.
Also, MyFICO reports my credit utilization on my revolving accounts (credit cards) at being 6% and that being “very good.” MyFICO classifies 7% and under as the best tier.
So I can’t think of any accurate reason for Credit Sesame to list this as the #3 reason my score isn’t higher?
4. Average Age of Accounts
No real complaints about this one. It tells a basic definition about average age of accounts and why they impact a credit score. I don’t really expect them to say anything else, since there’s not much to say on this matter.
However, I suppose it might be nice if they actually told me what the average age of my accounts are?
And the final verdict?
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 can’t be a scam or ripoff since a dime isn’t being paid.
But is it actually useful? That’s the question to consider.
If you don’t know what your creditworthiness is – then yes – this service is a good useful way to check for free how you measure up.
But if you want to know your true FICO score (not a FAKO) and want a more in-depth analysis of what’s on your credit report, than unfortunately Credit Sesame falls short since its score accuracy is close but not the same as FICO.
I probably won’t do another Credit Sesame review until [if] they make it a more robust platform. If they ever add more features like telling the number of credit inquiries, average age of accounts, and other useful info, then I would be interested. But for now, I’ll be closing my account.
This review has been updated for 2013.