Just as the idea of free credit reports gained momentum throughout 2002 and 2003, so is the momentum building for free credit scores annually.  But it doesn't make sense to do it the same way as free credit reports. Here's why:

• Your credit reports are issued by only three companies; Equifax, Experian and TransUnion (yes, I know about Innovis, but let's stick to the big three).  And since you only have three credit reports, it's pretty easy to simply say that you'll get a copy of each for free once per year.  That doesn't make sense with credit scores.  Why?  Because you have dozens, if not hundreds, of credit scores. Multiply each by three credit bureaus and the number is unwieldy.  We tend to focus on FICO, and rightly so, but even within the world of FICO scores there are multiple generations of the model still in production, and there are different flavors of the FICO score called Industry Options. Most lenders use their own custom credit scores and a variety of other types of scores that are also driven from your credit reports.  Too many scores to simply say that you'll get a free one each year.  They're not all the same and they're not all built to do the same things.  Think of it in terms of beer, people...hundreds of different brands, all under the general category of "beer."

• Your credit scores change, and change a lot.  Giving you one score every 12 months simply isn't enough because it can change drastically in as little as one week.  If you're going to be gifted free scores it should be monthly, not annually.

There is an easier way.  Simply require lenders and insurance companies to disclose the score and the associated score factors with each application they process and their decision based on that score.  It's already very successful in the mortgage environment and has brought clarity to credit scores used for mortgage lending.  This takes the responsibility out of the credit bureau's hands, which prevents the disclosure of scores that are not the industry standard.  Requiring the lender to perform the disclosure guarantees that the score you see is the same exact score that the lender used.  Plus, I think forcing the credit bureaus to give away a free score in addition to a free credit report is a little unfair to them.  What's next...free credit monitoring?

John Ulzheimer – Credit scoring and credit reporting expert and author, John is the President of Consumer Education for Credit.com. Formerly with Equifax and Fair Isaac, John shares his unique insight of the inner workings of credit scoring models and the credit reporting industry on CreditBloggers.com.

Just as the idea of free credit reports gained momentum throughout 2002 and 2003, so is the momentum building for free credit scores annually.  But it doesn't make sense to do it the same way as free credit reports. Here's why:

• Your credit reports are issued by only three companies; Equifax, Experian and TransUnion (yes, I know about Innovis, but let's stick to the big three).  And since you only have three credit reports, it's pretty easy to simply say that you'll get a copy of each for free once per year.  That doesn't make sense with credit scores.  Why?  Because you have dozens, if not hundreds, of credit scores. Multiply each by three credit bureaus and the number is unwieldy.  We tend to focus on FICO, and rightly so, but even within the world of FICO scores there are multiple generations of the model still in production, and there are different flavors of the FICO score called Industry Options. Most lenders use their own custom credit scores and a variety of other types of scores that are also driven from your credit reports.  Too many scores to simply say that you'll get a free one each year.  They're not all the same and they're not all built to do the same things.  Think of it in terms of beer, people...hundreds of different brands, all under the general category of "beer."

• Your credit scores change, and change a lot.  Giving you one score every 12 months simply isn't enough because it can change drastically in as little as one week.  If you're going to be gifted free scores it should be monthly, not annually.

There is an easier way.  Simply require lenders and insurance companies to disclose the score and the associated score factors with each application they process and their decision based on that score.  It's already very successful in the mortgage environment and has brought clarity to credit scores used for mortgage lending.  This takes the responsibility out of the credit bureau's hands, which prevents the disclosure of scores that are not the industry standard.  Requiring the lender to perform the disclosure guarantees that the score you see is the same exact score that the lender used.  Plus, I think forcing the credit bureaus to give away a free score in addition to a free credit report is a little unfair to them.  What's next...free credit monitoring?

John Ulzheimer – Credit scoring and credit reporting expert and author, John is the President of Consumer Education for Credit.com. Formerly with Equifax and Fair Isaac, John shares his unique insight of the inner workings of credit scoring models and the credit reporting industry on CreditBloggers.com.