I recently had a connect the dots moment I’d like to share with you. In a program called FICO Score Open Access, FICO announced on November 4, 2013 that it plans to allow any lender who uses FICO scores to determine an applicant’s creditworthiness to allow the score to also be available to all applicants for free. So far only Barclaycard US and First Bankcard have signed up, but surely a tremendous amount more credit card companies will sign up once the word gets out to consumers.
When I applied for the Barclaycard Arrival World MasterCard to get double travel rewards points recently, I received my latest credit score in the mail of 805. At the time, I didn’t think it was strange because I always got my credit score in the mail during all my previous eight mortgage refinances. I also hadn’t applied for a new credit card in a decade so I thought receiving my score was just status quo or at least a nice gesture by Barclaycard. The reality is that most credit cards don’t send you your credit score if you apply for their card. The reason why we do get our credit scores during a mortgage refinance is because we’re paying to refinance or take out a new mortgage. Nobody pays to apply for a credit card!
As any proud personal finance blogger would do, I proceeded to write a post on how to improve your credit score to 800+ with this newfound information. We know that pulling your credit score too often may bring down your credit score. The idea is that if there’s a sudden rush of credit inquiries, it may signal the person is in a cash crunch.
Can you imagine getting your credit score pulled, getting denied by the credit card company, and being left in the dark as to why? That would be as aggravating as getting a college or work rejection letter in the mail with no reason for denial. The new FICO Score Open Access plan will supposedly allow participating banks to show applicants their credit history, any late payments, and debt levels.
You can still get your latest TransUnion credit score for free from a trusted company like GoFreeCredit.com if you aren’t looking for a participating rewards credit card. Just make sure you cancel the credit monitoring service before the grace period is over if you don’t want to get charged for such a service.
I’m predicting Barclaycard US and lesser known First Bankcard are going to gain outsized market share of new credit card applicants until every other credit card company participates as well. The FICO Score Open Access system is a great step for consumer rights.
Check Your Credit Score: Take a moment to check your free TransUnion credit score through GoFreeCredit.com, a company I trust. 30% of credit reports have errors, which could put a serious hamper on your refinancing or new loan borrowing abilities. I had a $8 late payment I didn’t even know I owed crush my score by 100 points come up during my last refinance. The average credit score for rejected mortgage borrowers has risen to 729 due to more stringent lending requirements. Do you know what your score is?