FICO Score Open Access: You Now Get A Free Credit Score When You Apply For A Credit Card

light-bulb-momentI 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, 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.

RECOMMENDATIONS

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?

Barclaycard® Ring MasterCard® – 1% Back on Balance Transfers – This great card has the lowest APR I’ve seen in the market today at 8% compared to the average credit card interest rate is 15%. You get 1% back on all balance transfers made in the first 60 days of opening an account and there is no annual fee or balance transfer fee. There’s a fantastic social community of Ring MasterCard holders once you join to interact with and save money.

The Hawaiian Airlines® World Elite MasterCard® – Hawaiian Airlines is hands down the best airlines in America. Their service is impeccable, they provide food, snacks, and drinks included in your air fare, and each seat comes with a USB charger. This Hawaiian Airlines card gives 35,000 bonus miles if you spend $1,000 within the first 90 days, gives you one complimentary bag to check-in, and a one-time 50% off discount off your companion’s air fare! Round-trip ticket prices range from $450 – $1,200, so that’s a $225 – $600 savings right there to paradise! You also get $100 off a companion tick for roundtrip coach travel between Hawaii and North America each year, 1 point for every $1 spent, and 5,000 annual bonus miles after $10,000 in annual spend. The annual fee is only $89. Oahu is my home state and it is the most beautiful place to vacation!

Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship.

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Comments

  1. Dan says

    Have you heard of Credit Sesame? They have a convenient, user-friendly app that does credit score monitoring and sends a monthly update, including an updated figure of Experian’s National Equivalency Score (not FICO) each month. They aren’t a lender or financial institution, so it’s a soft inquiry – thereby not impacting credit score.

    It’s a great way to keep a general pulse on your credit score on a monthly basis without impacting the score itself. The app has other tools as well to help consumers manage debt – I personally only use it for the score monitoring feature. I don’t work for them or anything – just thought I’d suggest it as this helped solve the puzzle of score monitoring for me.

    • says

      Good stuff. Yes I’ve heard of them, but haven’t looked into them in detail. I think they are right here in the Bay Area too, so perhaps a power lunch in the city is up for the making! Hope they pay.

  2. says

    Couldn’t agree with you more Sam that it is a great step forward for consumers and their financial education to know their score after applying for a credit card. That being said, I think their are other tools out there that can provide similar services without worrying about cancellations or otherwise. Credit Karma and Credit Sesame are both services with no “membership” or other charges, but who make their money through affiliate advertising and offering financial products outside of the actual credit reporting. Something worth checking out for those interested.

  3. says

    This is something I never thought about. Like you, I never connected the dots. What a great way to inform individuals who are denied a credit card application. I hope that all credit card companies follow this same model in the future.

  4. says

    That’s awesome! I’ve always been frustrated by the fact that it has historically been difficult to find out my own credit score (unless I was applying for a mortgage or if I wanted to PAY for it, which seemed horribly wrong). I certainly hope that other credit card companies follow suit.

  5. says

    Many years ago, I remember receiving a brand new American express credit card and rejected for a Wells Fargo line of credit. It turned out I had a “charge off”. A black mark that was bogus. It took me 6 months to correct. I like that the credit bureaus are much more responsive!

  6. says

    Interesting! Hopefully we get more credit cards on board soon. It’s common sense, really. You get that information whenever you apply for a loan with a bank, so there’s no reason why it shouldn’t apply to credit cards as well.

  7. says

    That’s great news. It would have been nice if they implemented this earlier but better late than never. It makes a lot of sense to share that info with the consumers. Increased transparency is better for everyone.

    • says

      Sometimes one can have a good credit score, but still get rejected due to a high debt/income ratio. For example, you might be temporarily unemployed, or in a seasonal slow period for income, but still have a high CS and be denied.

  8. Rich Spaulding says

    I like this move. Credit cards are a good way to build credit. First time home buyers can kill two birds with one stone. Apply for a credit card. Make payments on time. See their credit score for free.

  9. Ace says

    Well….. I had to replace my 96 Honda today. It got T-boned! Which sucks! I was hoping to milk a few more years out of this thing. And it is quintessential “stealth wealth” car. But….. It is good to be alive! Thank you Honda.

    In the process…. I got my FICO (well above 800). I think more transparency is a good thing.
    Consumers should always be able to see where they stand credit wise for free. Maybe we all should harass our worthless congress to do some good for a change?

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