Keeping Score: Free FICO Popular with Discover “It” Cardholders
About a year ago, we looked at the direct mail campaign for the then-new Discover It card. In the months since, Discover invested heavily in advertising the product and added some differentiating cardholder benefits. Then, in November 2013, Discover followed Barclaycard and FNBO’s First Bankcard to offer free FICO® Scores to “It” cardholders. The free reports, made available through the new FICO® Score Open Access program, are designed to help financial service providers build customer “loyalty, trust and growth through greater transparency” and greater consumer understanding of what FICO scores are, how they are calculated and how they are used for risk management decisions. As a start, Discover worked quickly to be the first issuer to print the cardholder’s actual FICO score on each It card statement (with plans to roll out statement-based score reports to millions of its other Discover cardholders accounts later in 2014). An “as of” date is provided with the score denoting how current the data is, along with an explanation of the criteria used to determine it.
This information – and its prominent placement on the cardholder statement – reinforces Discover’s It card positioning as a simple, straightforward, consumer-driven product with strong values, robust incentives and “no surprises.” Cardholders are able to see how their spend, credit utilization and payment decisions combine to affect and change their FICO scores and how credit affects their personal financial goals. One can see how the real-time monitoring could compliment the It card’s other features such as no late fees, no over-limit fees and no penalty APR for late payments. This would be especially attractive to those who revolve credit, have a relatively low score or history of problems and value a less punitive credit card structure. In terms of cardholder acquisition, Discover is aggressively promoting its free FICO score using television, online banner ads and direct mail using headlines and themes touting free FICO scores as “Another Discover First” and a “Game Changer” and suggestively stating to card prospects that “Your c rd is m ssing s mething.” To some people, seeing the monthly score on their statements may feel invasive and creepy, but for the most part, Discover reports that it has experienced an overwhelming positive response to the free scores. Discover’s cardholder scores are based on data from TransUnion. Since FICO Score Open Access allows financial institutions to share “previously purchased” FICO scores with their customers at no additional charge, single agency reporting (in this instance leaving out Equifax and Experian) could be confusing to cardholders who obtain differing scores from multiple sources. Barclaycard and First Bankcard are taking a more conservative approach to offering FICO scores to their cardholders. Currently Barclaycard Arrival, Barclaycard Ring, Barclaycard Rewards, Frontier, Juniper and Carnival cards provide complimentary scores, updated on a bimonthly basis via a cardholder’s online account and offers email alerts if the score changes based on utilization of existing credit or unpaid accounts. First Bankcard plans to provide scores monthly via the web to its 2.5 million cardholders during 1Q2014 when they log into their accounts.
