When credit card issuers make a decision about your account, they look at one of your credit scores, so why shouldn’t you be able to take a look as well? Recently, the Consumer Financial Protection Bureau (CFPB) called on card issuers to do just that. In February, CFPB Director Richard Cordray sent letters to the nation’s top credit card companies urging them to follow suit by making credit scores and related content freely available to their customers.
Two card issuers – Barclaycard and Discover – took the lead before Cordray’s letters went out, offering their cardholders access to free credit scores.
In November, Barclaycard US and First Bankcard customers began to see their FICO scores for free. When lenders evaluate consumers’ credit applications, they most often use FICO scores, and through a new program called FICO Score Open Access, lenders can opt to give their customers free access to their credit scores. Discover It cardholders also have access to a free credit score every month through the same program.
Now, Capital One has jumped into the game as well.
How It Works
Capital One cardholders will now be able to see a credit score, in addition to a credit profile including the number of accounts, balances and recent credit inquiries according to data supplied by TransUnion, one of the three major credit reporting agencies. Cardholders can track their credit score history, create credit alerts, and use a mobile app to track their credit scores.
This tool is provided to most Capital One cardholders free of charge, except those who hold a card that is co-branded with a partner, such as their GM Card. And while the data used for this simulation is pulled from a major consumer credit bureau, it’s an education score, meaning it isn’t used by lenders.
Because there are many different credit scoring models out there, it can be difficult to understand your credit scores without a context. That’s why it’s best to monitor the same credit score over time to gauge meaningful changes that indicate you’re making progress, or that there’s a problem with your credit that you need to address. There are many ways to get your credit scores — through paid services, or for free through some credit issuers. You can also access your credit scores using free tools on Credit.com, which will also help you track and analyze your credit data, and set goals to build your credit over time.
Why Your Credit Scores Matter
“Credit reports and scores can determine the terms of people’s mortgages, whether they qualify for auto loans, or if they are eligible for different credit cards,” said Cordray. “Making consumers’ credit scores freely available on their monthly statement or online makes it easier for them to spot problems with their credit report.”
Furthermore, Capital One performed its own survey, which found that nearly half of the respondents (41%) did not know their current credit score, and that number jumps to 63% among 18- to 24-year-olds. In fact, more than 30% of those polled have not checked their credit score in the last year. According to Capital One spokesperson Sukhi Sahni, “We have been working on these features for some time, and we wanted to offer our customers more than just a basic credit score.”
Cardholders should immediately have access to the mobile app for Android and iPhone devices, and the online application will be available soon. There is a lot of mystery surrounding credit scores, but when credit card issuers partner with credit bureaus to offer their customers as much information as possible, everyone stands to benefit.
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