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How to check your credit score for free



You’ve probably heard of credit scores and wondered if it’s something you need to know about. It might sound boring and annoying, but the simple answer is yes, credit scores are important.

According to Experian, a whopping 72% of young adults aged don’t know what theirs is, despite the fact it’s one of the most basic things you can check to help you manage your finances. Better still, it’s free, quick and easy to do.

Note sure how to get started? Here’s everything you need to know about checking it, building it, improving it and getting a step closer to being better with money.

What is a credit score?

Whether you’re applying for a new mobile phone contract, trying to arrange an overdraft or maybe even looking to apply for a mortgage, the first thing lenders will look at is your credit score.

It’s basically a three digit number that shows lenders how reliable you are when applying for credit. If it’s bad, you won’t get the best deals and could even be rejected.

So, before you apply for anything, it’s a good idea to check what information companies can see about you. You have the legal right to check your credit score for free.

How to check your credit score

There are three main credit reference agencies (CRA) – Experian, Equifax and Transunion.

It’s a good idea to check your score with all three as they may hold different information about you – they are all free to use for basic services (you’ll have to pay for more comprehensive checking services).

Each CRA will hold a credit file about you, such as information on bank accounts, credit cards, overdrafts, County Court Judgements, whether you are on the electoral register, your name and date of birth. Think of this as your financial CV.

Based on this information, you’ll be given your credit score; it’s usually colour coded in traffic light colours, so you can see how well you’re doing.

stacked pound coins on a pink background

xur82Getty Images

According to Equifax, credit scores from 580 to 669 are considered ‘fair’, 670 to 739 are ‘good’, 740 to 799 are ‘very good’, with 800 and up is seen as ‘excellent’.

Now every time you apply for credit or financial products then lenders will check this score before agreeing anything with you.

A low score means you may not get the best monthly phone contract or be rejected for a 0% finance deal for example. A bad credit score will ultimately end up costing you more, so you should work towards keeping it in good shape. So, it’s time to bite the bullet and check the score.

How to improve your credit score

Don’t worry if your score is on the low side, there are easy moves you can make to improve it.

According to James Jones, head of consumers affairs at Experian, there are six simple ways to improve your score:

  1. Register to vote (make sure you use the address you live at and are using to make applications).
  2. Reduce your debt (credit card payments and overdrafts for example).
  3. Don’t apply for too much credit in a short space of time.
  4. Pay your bills on time (set up a direct debit to avoid missed payments).
  5. Don’t have joint accounts with someone who has a bad credit score, because you’ll become financially linked to them.
  6. When you do apply for credit cards or loans, ask for a ‘soft search’ . A soft search won’t leave mark on your score if you are rejected or decide not to take out a product, whereas a ‘hard search’ will leave a footprint on your file. A CRA may have an eligibility tool you can use or try this one from MoneySavingExpert before making any applications.
    1. You can also sign up to Experian’s ‘Boost’ service which allows you to use your payments made to streaming services, like Spotify and Netflix, to count toward your improving your credit score,” adds James.

      If you are paying rent on time, then making sure your payments count could significantly improve your credit score.

      If you are renting, check out CreditLadder, which ensures your rent payment counts towards your credit score. Next year, NatWest Bank is also launching a new app, Housemate, which will also help make your rent payment count towards building your credit score.

      If you are paying rent on time, then making sure your payments count could significantly improve your credit score.

      What if I don’t have credit history?

      If you are young and have never borrowed, then you won’t have a credit history; but a clean slate doesn’t mean you’ll be accepted for credit applications. You still need to prove you’re a reliable person to lend to.

      Even if you don’t plan to borrow anything right now, building some kind of credit history for the future is a good idea – like for when you make your first mortgage application or want to buy your first car. A good way to start is to prove you are a reliable borrower by starting with a credit builder credit card.

      These cards are for those with no credit (or even bad credit). You’re more likely to be accepted and given a small borrowing limit, but they do come with high interest charges. The trick is to use it for small purchases and set up a direct debit to pay the bill in FULL each month and on time, and that way you will not be charged interest or cause damage to your credit score. It’s important to pay this in full and on time. This will slowly help build your credit file and score.

      Keep an eye on your credit score

      Once you’ve checked it and taken steps to make your credit score the best you can, keep an eye on it regularly. It’s also a good way to detect fraud, should anyone try to open an account or take out a loan using your details. If this happens, be swift to report it to the credit agency.

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    Bad Credit

    If You Want Consumers to Lose, Network Regulation is a Must – Digital Transactions



    After the current U.S. Congress was sworn in, a predictable chorus of merchants, lobbyists, and lawmakers demanded new interchange price caps and other government mandates to decrease credit card interchange fees for merchants. The tired attacks on credit cards are an easy narrative that focuses almost exclusively on the cost side of the ledger, while completely ignoring the cards’ important role in the economy and the regressive effects of interchange regulation. 

    To lawmakers blindly acting on behalf of retailers, regulation is a brilliant idea—regardless of how it affects their constituents. For decades, they have promised these interventions would eventually benefit consumers. But the lessons from the Durbin Amendment in the United States and price cap regulation in Australia is clear. Although some policymakers bemoan the current economic model, arbitrarily “cutting” rates for the sake of cuts completely ignores the economic reality that as billions of dollars move to merchants, billions are lost by consumers. 

    For the uninitiated, let’s break down what credit interchange funds: 1) the cost of fraud; 2) more than $40 billion in consumers rewards; 3) the cost of nonpayment by consumers, which is typically 4% of revolving credit; 4) more than $300 billion in credit floats to U.S. consumers; and 5) drastically higher “ticket lift” for merchants. 

    Johnson: “To lawmakers blindly acting on behalf of retailers, regulation is a brilliant idea—regardless of how it affects their constituents.”

    These are just some of the benefits. If costs were all that mattered, American Express wouldn’t exist. Until recently, it was by far the most expensive U.S. network. Yet, merchants still took AmEx because they knew the average AmEx “swipe” was around $140, far more than Visa and Mastercard. 

    Put simply, for a few basis points, interchange functions as a small insurance policy to safeguard retailers from the threat of fraud and nonpayment by consumers. Consider the amount of ink spilled on interchange when no one mentions that the chargeoff rate for issuing banks on bad credit card debt exceeds credit interchange.

    Looking abroad, interchange opponents cite Australia, which halved interchange fees nearly 20 years ago, as a glowing example of how to regulate credit cards. In truth, Australia’s regulations have harmed consumers, reduced their options, and forced Australians to pay more for less appealing credit card products. 

    First, the cost of a basic credit card is $60 USD in many Australian banks. How many millions of Americans would lose access to credit if the annual cost went from $0 to $60? Can you imagine the consumer outrage? 

    In a two-sided market like credit cards, any regulated shift to one side acts a massive tax on the other. For Australians, the new tax fell on cardholders. There, annual fees for standard cards rose by nearly 25%, according to an analysis by global consulting firm CRA International. Fees for rewards cards skyrocketed by as much as 77%.

    Many no-fee credit cards were no longer financially viable. As a result, they were pulled from the market, leaving lower income Australians, as well as young people working to establish credit, with few viable options in the credit card market.

    Even the benefits that lead many people to sign up for credit cards in the first place have been substantially diluted in Australia because of the reduction of interchange fees. In fact, the value of rewards points fell by approximately 23% after the country cut interchange fees.

    Efforts to add interchange price caps would have a similar effect here in the U.S. A 50% cut would amount to a $40 billion to $50 billion wealth transfer from consumers and issuers to merchants. For the 20 million or so financially marginalized Americans, what will their access to credit be when issuers find a $50 billion hole in their balance sheets? 

    The average American generates $167 per year in rewards, according to the Consumer Financial Protection Bureau. Perks like airline miles, hotel points, and cashback rewards would be decimated and would likely be just the province of the rich after regulation. Many middle-class consumers could say goodbye to family vacations booked at almost no cost thanks to credit card rewards.

    As the travel industry and retailers fight to bounce back from the impact of the pandemic, slashing consumer rewards and reducing the attractiveness of already-fragile businesses is the last thing lawmakers and regulators in Washington should undertake.

    Proposals to follow Australia’s misguided lead in capping interchange may allow retailers to snatch a few extra basis points, but the consequences would be disastrous for consumers. Cards would simply be less valuable and more expensive for Americans, and millions of consumers would lose access to credit. University of Pennsylvania Professor Natasha Sarin estimates debit price caps alone cost consumers $3 billion. How much more would consumers have to pay under Durbin 2.0?

    Members of Congress and other leaders should learn from Australia and Durbin 1.0 to avoid making the same mistake twice.

    —Drew Johnson is a senior fellow at the National Center for Public Policy Research, Washington, D.C.

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    Bad Credit

    Increase Your Credit Score With Michael Carrington



    More than ever before, your debt and credit records can negatively impact you or your family’s life if left unmanaged. Sadly, many Americans feel entirely helpless about their credit score’s present state and the steps they need to take to fix a less-than-perfect score. This is where Michael Carrington, founder of Tier 1 Credit Specialist, comes in. Michael is determined to offer thousands of Americans an educated, informed approach towards credit restoration.

    Michael understands the plight that having a bad credit score can bring into your life. His first financial industry job was working as a home mortgage loan analyst for one of the nation’s largest lenders. Early on, he had to work a grueling schedule which included several jobs seven days a week while putting in almost 12-hour days to make $5,000 monthly to get by barely.

    “I was tired of living a mediocre life and was determined to increase the value that I can offer others through my knowledge of the finance industry – I started reading all of the necessary books, networking with industry professionals, and investing in mentorship,” shares Michael Carrington. “I got my break when I was able to grow a seven-figure credit repair and funding organization that is flexible enough to address the financial needs of thousands of Americans.”

    With his vast experience in the business world, establishing himself as a well-respected business leader, Michael Carrington felt he had the power to help millions of Americas in restoring their credit. Michael learned the FICO system, stayed up to date on the Fair Credit Reporting Act (FCRA), found ways to improve his credit score, and started showing others.

    The Tier 1 Credit Specialist uses a tested and proven approach to educate their clients on everything credit scores. Michael is leveraging his experience as a home mortgage professional, marketing executive, and global business coach to inform his clients. He and his team take their time to carefully go through their client’s credit records as they try to find the root of their problem and find suitable financial solutions.

    The company is changing lives all over America as it helps families and individuals to repair their credit scores, gain access to lower interest rates on loans and get better jobs. What Tier 1 Credit Specialists is offering many Americans is a chance at financial freedom.

    Michael Carrington has repaired over $8 million in debt write-ups and has helped fund American’s with over $4 million through thousands of fixed reports. “I credit our success to being people-focused,” he often says. “The amount of success that we create is going to be in direct proportion to the amount of value that we provide people – not just our customers – people.”

    Because of its ‘people-focused goals, the Tier 1 Credit Specialist is determined to help millions of Americans achieve financial literacy. It is currently receiving raving reviews from clients who are completely happy with the credit repair solutions that the company has provided them.

    Today, Michael Carrington is continuing with a new initiative to serve more Americans who suffer from bad credit due to little or no access to affordable resources for repair.

    The Tier 1 Credit Socialist brand is changing the outlook of many families across America. To do this, the company has created an affiliate system that will provide more people with ways of earning during these tough economic times.

    As a well-respected international business leader and entrepreneur with numerous achievements to his name Michael Carrington aims to help millions of Americans achieve the financial freedom, he is experiencing today. Tier 1 Credit Socialist is one of the most effective credit repair brands on the market right now, and they have no plans for slowing down in 2021!

    Learn more about Michael Carrington by visiting his Instagram account or checking out the Tier 1 Credit Specialist website.

    Published April 17th, 2021

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    Bad Credit

    Does Having a Bank Account With an Issuer Make Credit Card Approval Easier?



    Better the risk you know than the one you don’t.

    When it comes to personal finance, nothing is guaranteed. That goes double for credit. That’s why, no matter how perfect your credit or how many times you’ve applied for a new credit card, there’s always that moment of doubt while you wait for a decision.

    Issuing banks look at a wide range of factors when making a decision — and your credit score is only one of them. They look at your entire credit history, and consider things like your income and even your history with the bank itself.

    For example, if you defaulted on a credit card with a given bank 15 years ago, that mistake is likely long gone from your credit reports. To you and the three major credit bureaus, it is ancient history. But banks are like elephants — they never forget. And that mistake could be enough to stop your approval.

    But does it go the other way, too? Does having a bank account that’s in good standing with an issuer make you more likely to get approved? While there’s no clear-cut answer, there are a few cases when it could help.

    A good relationship may weigh in your favor

    Credit card issuers rarely come right out and say much about their approval processes, so we often have to rely on anecdotal evidence to get an idea of what works. That said, you can find a number of stories of folks who have been approved for a credit card they were previously denied for after they opened a savings or checking account with the issuer.

    These types of stories are more common at the extreme ends of the card range. If you have a borderline bad credit score, for instance, having a long, positive banking history with the issuer — like no overdrafts or other problems — may weigh in your favor when applying for a credit card. That’s because the bank is able to see that you have regular income and don’t overspend.

    Similarly, a healthy savings or investment account with a bank could be a helpful factor when applying for a high-end rewards credit card. This allows the bank to see that you can afford its product and that you have the type of funds required to put some serious spend on it.

    Having a good banking relationship with an issuer can be particularly helpful when the economy is questionable and banks are tightening their proverbial pursestrings. When trying to minimize risk, going with applicants you’ve known for years simply makes more sense than starting fresh with a stranger.

    Some banks provide targeted offers

    Another way having a previous banking relationship with an issuer can help is when you can receive targeted credit card offers. These are sort of like invitations to apply for a card that the bank thinks will be a good fit for you. While approval for targeted offers is still not guaranteed, some types of targeted offers can be almost as good.

    For example, the only confirmed way to get around Chase’s 5/24 rule (which is that any card application will be automatically denied if you’ve opened five or more cards in the last 24 months) is to receive a special “just for you” offer through your online Chase account. When these offers show up — they’re marked with a special black star — they will generally lead to an approval, no matter what your current 5/24 status.

    Credit unions require membership

    For the most part, you aren’t usually required to have a bank account with a particular issuer to get a credit card with that bank. However, there is one big exception: credit unions. Due to the different structure of a credit union vs. a bank, credit unions only offer their products to current members of the credit union.

    To become a member, you need to actually have a stake in that credit union. In most cases, this is done by opening a savings account and maintaining a small balance — $5 is a common minimum.

    You can only apply for a credit union credit card once you’ve joined, so a bank account is an actual requirement in this case. That said, your chances of being approved once you’re a member aren’t necessarily impacted by how much money you have in the account.

    In general, while having a bank account with an issuer may be helpful in some cases, it’s not a cure-all for bad credit. Your credit history will always have more impact than your banking history when it comes to getting approved for a credit card.

    For more information on bad credit, check out our guide to learn how to rebuild your credit.

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