What’s The Catch With Free Credit Scores?

What’s The Catch With Free Credit Scores?

Written by Priyanka Correia
Fact-checked by Caitlin Wood
Last Updated August 11, 2021

Your credit score is a 3-digit number between 300 – 900 that lenders use to evaluate your likelihood of making your payments on time. The higher your number the better your chances of being approved for different credit products and services. Given the importance of a credit score, it’s understandable that many Canadians want to keep a close eye on it. Especially when you consider the number of factors that can influence it including your payment history, credit utilization, credit mix, credit length and credit inquires.

What’s The Catch With “Free” Credit Scores

Services offering free credit scores have become increasingly popular over the last few years. While these companies are offering a seemingly great service, there is some skepticism around their product. So, we’re here to find out what’s the catch with these “free” credit score offers. 

Check out the benefits of monitoring your credit score.

Number One

The credit score you receive may not be the same as the one your creditors see. While many of these service providers have partnered up with Equifax or Transunion, the credit score that they provide is based on a particular credit scoring model that is different than the one most creditors use. That being said, it is still quite accurate and can provide you with a good understanding of where your credit stands.

Learn more about how you credit score is calculated.

Number Two

When you sign up for these services, many of the providers will gather and use your data for marketing purposes. One may even say that your privacy is the real price you pay for the “free” service. Moreover, due to the sensitivity of the information, you may find yourself in a vulnerable position if the company were to ever experience a breach in data. 

Find out if you’ve been a victim of identity theft.

Number Three

Some companies that offer a free credit score service usually provide your score for “free” on the basis that you subscribe to their credit monitoring service as well. While you can cancel the service during the trial period to avoid any charges, it can sometimes be a cumbersome process.

So there you have it! Those are the three main catches to these “free” credit score services.

Lookout Are Free Credit Scores The Real Deal?

Loans Canada Lookout

LOOKING OUT FOR YOUR BEST INTEREST

Rating of 5/5 based on 2 votes.

Priyanka is a personal finance expert at Loans Canada. She is passionate about money management and educating Canadian consumers about how to take control of their financial lives. She has taken financial control of her life by using Mint to budget and track her expenses while growing her wealth by investing through Wealthsimple. She also believes in having an emergency fund, so she keeps a good sum of money in an easily accessible high-interest savings account. She also uses the American Express Cobalt Card to earn points on all her purchases, further fueling her savings goal. She also uses Loans Canada’s lender directory whenever she wants to compare rates from different lenders.

Click on the star to rate it!

How useful was this post?

Research & Compare

Canada's Loan Comparison Platform

Largest Lender Network In Canada

Save time and money with Loans Canada. Research and compare lenders before you apply. Share your experiences with Canada's top lenders.

Make Smarter Borrowing Decisions

Whether you have good credit or poor credit, building financial awareness is the best way to save. Find tips, guides and tools to make better financial decisions.

Save With Loans Canada

Special Offers

Build Credit With Refresh Financial

Build Credit With Refresh Financial
Popular

Build credit while spending money with the Refresh Financial VISA card.

View Offer
Build Credit For $7/Month

Build Credit For $7/Month
Popular

With KOHO’s prepaid VISA card you can build a better credit score for just $7/month.

View Offer
Make No Payments Until 2022

Make No Payments Until 2022
Ends Soon

Borrow up to $50,000 from our partner, Fairstone, and don’t pay until 2022*

View Offer
Industry Spotlight

What's happening with Canada's credit industry?

goPeer — Helping Consumers Achieve Financial Freedom by Connecting Canadians Looking For Financing With Canadians Looking to Invest

goPeer — Helping Consumers Achieve Financial Freedom by Connecting Canadians Looking For Financing With Canadians Looking to Invest

goPeer is Canada's first consumer peer to peer lending platform and connects creditworthy Canadians looking for a loan with everyday Canadians looking...

Read Post
Locator
Find The Best Rate
In Your Region
OR
Best Personal Loan Provider by Greedy Rates
Icon

Confidential & risk-free

All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster. Loans Canada and its partners will never ask you for an upfront fee, deposit or insurance payments on a loan. Loans Canada is not a mortgage broker and does not arrange mortgage loans or any other type of financial service.

When you apply for a Loans Canada service, our website simply refers your request to qualified third party providers who can assist you with your search. Loans Canada may receive compensation from the offers shown on its website.

Only provide your information to trusted sources and be aware of online phishing scams and the risks associated with them, including identity theft and financial loss. Nothing on this website constitutes professional and/or financial advice.

Your data is protected and your connection is encrypted.

Loans Canada Services Are 100% Free. Disclaimer

Keep Track Of Your Credit Score

Subscribe with Credit Verify to monitor your credit rating and get your free credit score.