Is Credit Sesame a Scam or Legit?

By Lori Kelley

Your credit score is important for a variety of reasons. This score can have a huge impact on how much you’ll end up paying in interest on loans, sometimes with a difference of tens of thousands of dollar, depending on how good your FICO score is. For that reason, people who are looking to take out a home mortgage or car loan are rightly concerned to know their credit score.

Since credit scores cost money if you get them directly from the credit bureaus which keep them, consumers looking to find out their score often come across sites like Credit Sesame that offer free credit scores. Anytime the word “free” and financial information go hand-in-hand, you should question the legitimacy of the website and offer to protect your finances. Your should begin to ask questions like, “Is Credit Sesame a scam?” You should also wonder if Credit Sesame is safe and secure. In order to determine the answer to these questions, it’s important to know how their free credit offer works.

Credit Sesame was launched in 2010, and has a business model that’s much like that of Credit Karma. They provide a number of financial services which helps you understand your credit score standing. While they give you a score in generally the same way as Credit Karma does, the way that the scores are generated is a bit different. Credit Karma uses Transunion data to generate their score while Credit Sesame uses data information generated from Experian.

In doing so, they do not charge money or force you to sign up with a service in order to access to your credit score. Instead, they show advertising and perform lead generation for other companies in order to make their money. As you use their site, you may come across offers to lower your mortgage payment through refinance, or a credit card offer that may have a better interest rate than your current card. If you happen to sign up with one of these offers, Credit Sesame gets paid for the referral, and this is how they earn their money. It’s a legitimate business model which means the offer is not a scam, but it’s important to understand exactly what you’re getting since it might not be what you think.

One of the big issues to be aware of is that the credit score you receive from Credit Sesame is not your FICO credit score. If you are looking for an accurate score because you’re going to be taking out some type of loan, the score that you receive from this service could be higher or lower than your real FICO score. Instead, you are getting what is called the Experian National Equivalency Score.

The question becomes, “Why wouldn’t they use your real FICO score?” The reason is that your real FICO score costs about $20 to obtain which would create a cost that would make their business model based on advertising and lead generation fall apart. The reality is they couldn’t afford to pay for this and keep the credit score free. If they tried, they would go out of business. So what they do is license a less expensive version of your credit score which will give you an approximation of your FICO score, but not your exact score. It’s a trade-off that could or could not be acceptable depending on why you need access to your credit score. So, while you will be getting a free credit score, you won’t be getting the actual credit score that you probably thought you would be getting.

The other big issue is that you need to turn over sensitive financial information to this third-party company in order to get the free score. That leaves open one more possible way to have your financial information breached than if you obtained this information yourself. There are a number of ways that you can get your credit report for free without having to use a third-party company.

In the end, Credit Sesame is legit. It’s not a scam and you can get a credit score for free without having to give a credit card number to obtain it. You will get a score that is similar to your true FICO score, but it won’t be the same, and you won’t know if it’s higher or lower than the real one.