Free credit scores are the newest battleground in the ultra-competitive fight for credit card customers.

Until late last year, if consumers wanted to see the magical three-digit number that often determines their financial fate, they generally had to pay $20 or so. But over the last few months Discover Financial Services (DFS) and Barclays' U.S. credit card division began offering access to their customers at no charge.

Then last week the Consumer Financial Protection Bureau said it is "strongly encouraging" other card issuers to follow suit. Almost immediately, Capital One Financial (COF) announced that it will start offering free credit scores by the middle of March.

American Express (AXP) is also looking into providing credit scores, a spokeswoman for the New York card company says. "We are definitely very open to this," says AmEx spokeswoman Sravanthi Agrawal.

Other major card companies are more circumspect about their plans, but "several" of the large issuers are currently in talks with credit score industry leader Fair Isaac Corp., according to FICO spokesman Anthony Sprauve.

Consumer advocates are hopeful that pressure from regulators and good old-fashioned competition will persuade more companies to enter the fray. "The more issuers that provide the credit scores to their customers, the better," says Chi Chi Wu, a staff attorney at the National Consumer Law Center.

Already card issuers and credit score providers are looking for ways to differentiate their new products from their competitors'. In the same way that card companies seek to convince consumers that their rewards offers are superior, they're now starting to compete over the details of their credit score offers.

For example, Barclaycard US sends emails to its customers whenever their credit scores change, which alerts them to the effect certain behaviors have on their scores. "It allows consumers to be proactive in managing their financial health," says Paul Wilmore, Barclaycard's managing director of consumer markets.

Discover is touting a variety of free financial management tools that it provides its customers, beyond just their credit score. "We make it our responsibility to give people real power to map successful financial paths for their lives," Brian Hughes, Discover's senior vice president of cardmember services, says in an email.

FICO, which is providing the credit scores that go to Barclaycard and Discover customers, points out that those scores are the same ones that the card issuer is using to manage the consumer's account.

"It's not an educational score. It's not a theoretical score. It's the exact score that the issuer is using to manage that account," FICO's Sprauve says.

Those comments implicitly offer a contrast with the approach being taken by Capital One. Rather than partnering with FICO, the McLean, Va., card issuer plans to provide its customers an "educational credit score" from the credit reporting company TransUnion.

Capital One spokeswoman Pam Girardo acknowledges that the TransUnion score the company will provide to its customers is not the same score that Capital One uses to approve and price customer accounts. But using the TransUnion score will allow Capital One to provide its customers a wide range of online tools for managing their credit scores, she says.

One of those tools is Capital One's "Credit Score Simulator," which allows consumers to see how their credit score would likely be affected if they paid off their existing card balance, increased their credit limit, took out a mortgage and so on.

Capital One also plans to provide its customers a letter grade for various factors that affect their credit scores, including "on-time payments," "credit utilization" and "new accounts."

FICO says that it's not charging lenders, which already purchase the company's credit scores, any additional money for the right to provide that score directly to the consumer. Instead it is reworking its existing contracts to allow the service.

"There's no additional cost to the lender, or to the consumer, to do this," FICO's Sprauve says.

But Capital One says that its approach allows it to give customers a richer body of useful information than competitors who provide a FICO score do. Barclays informs its customers of the two biggest factors affecting their score.

TransUnion's educational scores are generally consistent with FICO scores, Capital One's Girardo adds. She points to a CFPB study from September 2012 that found educational credit scores were in the same score category as FICO scores 80% of the time.

That may not be good enough to satisfy consumer advocates.

The card companies should provide their customers the same credit score they're using to manage accounts, the consumer law center's Wu argues. In about one out of five cases, educational scores will provide consumers a misleading picture of their actual credit score, she says.

Some of the largest credit card companies have yet to weigh in on the idea of providing free credit scores to their customers.

Bank of America (BAC) "supports providing consumers with the tools they need to better understand their financial situation," a spokeswoman said in an email, but she offered no further comment.

A spokesman for JPMorgan Chase (JPM) declined to comment, and a spokeswoman for Citigroup (NYSE: C) did not respond to a request for comment.

Meanwhile, FICO is also in talks with large mortgage lenders and auto lenders to allow them to provide free credit scores to their customers, Sprauve says. "We're going far and wide," Sprauve says. "There's no limit from our end in terms of who could participate."

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