As the Consumer Financial Protection Bureau calls on financial services companies of all kinds to provide more free access to consumer credit scores, Hyundai Capital America expanded its partnership with FICO this week.
Officials from Hyundai Motor Finance and Kia Motors Finance explained the move made them one of the first captive auto finance companies to provide free FICO scores to all of their customers as part of the FICO Score Open Access program.
Now, all Hyundai Motor Finance and Kia Motors Finance customers can opt in via the HMF and KMF website and mobile platform. Participating customers are able to view their free FICO Score from HMF and KMF when they log into their account.
In keeping with the company’s “Go Paperless” efforts, the scores will only be available online.
The FICO score will be updated on a quarterly basis, and customers will continue to have access to their free FICO score for one year after their retail finance or lease contract is paid off.
Last year, HCA became the first captive auto-finance company to offer free FICO scores to customers, focusing exclusively on participants in the company’s college grad program. Hyundai Capital America senior vice president of sales and marketing Larry Frankel explained the latest step represents a major expansion of the program, and an increased commitment to helping customers stay informed and empowered when it comes to their financial health.
“We’re proud to be a leader amongst the captive auto-finance companies in providing free FICO scores to all of our customers,” Frankel said. “From applying for a loan to returning a lease, we’re committed to making the financing process an easy and positive experience for our customers.
“This program enables us to add transparency on top of convenience,” he continued. “It’s a great tool that helps us further demonstrate to our customers that we are focused on building long-term relationships and serving their auto-financing needs for years to come.”
The move made by these captives continues a string of auto finance companies offering free credit scores. Early last month, President Obama highlighted the decision made by Ally Financial to offer its auto finance customers free access to their FICO score as a means to better understand their credit health.
Obama mentioned the development during an event at the Federal Trade Commission highlighting the administration’s BuySecure initiative, which was launched last year to safeguard Americans’ financial security.
And when CFPB director Richard Cordray offered prepared remarks during the bureau’s Consumer Advisory Board Meeting on Feb. 19, much of his presentation focused on how important regular credit score availability can help consumers.
“As public awareness grows and spreads, people also will likely want to learn more about how to improve their credit scores and build their credit profiles in ways that will make them better managers of their financial affairs and more attractive candidates for credit. This is a win-win both for consumers themselves and for financial service providers,” Cordray said. “In the past, too many people were unaware of the importance of their credit standing until it was too late: after a credit application had been denied or identity theft had already caused extensive damage.
“Although credit scores provide just a partial picture of one’s finances, making the scores available to consumers for free will help prompt busy Americans to review their credit standing and take action accordingly,” he continued. “An improved credit score will open up much greater access to credit and render the available credit more affordable than before. That will translate into a direct and substantial improvement in their financial lives.
“To better understand people’s perspectives on their credit scores, we have been conducting focus groups with consumers from a diverse set of demographics across the country,” Cordray went on to say. “We are quite interested to learn about consumers’ experiences in checking their credit report or credit score and what motivates them to do it.”
In addition to providing customers with online access to their FICO scores, Hyundai Motor Finance and Kia Motors Finance indicated they will also provide the top two factors currently affecting the customer's individual FICO scores as well as online access to educational content designed to help customers understand their credit score.
“We applaud Hyundai Capital America for being an early adopter of the FICO Score Open Access program,” said Jim Wehmann, executive vice president of scores at FICO.
“This step will provide more borrowers across the country with the tools and information they need to more fully understand how to manage their financial health and build a strong financial foundation for the future,” Wehmann added.