No More Excuses: FICO Makes Credit Monitoring Easier

man holding a dollar signYou are probably tired of hearing that your credit score really matters. It is something that the financial industry deems so important that a lot of financial opportunities are tied up with it. While it is not the only measurement, it holds enough influence to help you get a lot of benefits that will allow you to grow your personal net worth. For instance, it can keep you from getting a good deal on your home loan, being hired to work for a reputable company and even acquiring a good home in a respectable neighborhood.

But to ensure that you have a good credit score means you have to get serious about credit monitoring. There are so many things that can go wrong if you leave it unattended. Identity theft is so rampant these days and you never know if someone is using your name to borrow money that they have no intention of paying back. You can probably guess who will suffer because of this. Certainly not the creditors or lenders involved.

A lot of people think that credit monitoring is a waste of time because they fail to realize the extent of the damage that identity theft can cause. But if you talk to a person who had been a victim, you will understand how the monitoring of your credit score can seem like a small effort in exchange of what it will prevent.

About FICO’s Score Open Access

In truth, there is no valid excuse to not check your credit report every now and then. Not with the latest news coming out of FICO. Probably the only reason is that you are just too lazy to do it. Even before FICO’s announcement, you did not have to spend for it because you could get your free annual credit report from any of the three major credit bureaus (TransUnion, Equifax or Experian). The Annual Credit Report website allows you to access these three reports (one from each bureau) so you can download the latest copy of your credit history.

But things can get so much better now. Thanks to the FICO Score Open Access, consumer can get their actual credit score every time a lender pulls out one. Because they hold the majority of credit scores that lenders, creditors, employers and other entities look into, getting access to a free FICO score is something that you want to have.

This program actually targets financial institutions and the other clients who purchase credit reports to do a background check on consumers. The purpose of this program is to help these institutions and companies to develop loyalty with their own pool of customers.

The idea is to get customer transparency to increase customer profits. Based on the overview on the website, this program offers the following features:

  • Gives the FICO clients the ability to share the credit scores of their own customers – with no additional fees from FICO.

  • This privilege can be done frequently, depending on the need (monthly, quarterly).

  • Can be acquired by the owner of the report for free through various channels (Internet, mail or mobile).

  • Reveals two key factors that influenced the FICO score.

  • Has the option to show up to 12 months worth of historical trends of the score. The same is true for the option to look at the strength of the credit score through the FICO Score Meter.

  • Allows anyone who has access to FAQs and consumer credit lessons.

There are more features that are meant to benefit the financial institution that is paying for the report but for the consumer owning the credit history, these are the most relevant.

The benefits of this program is mostly be geared to attract financial institutions but that is understandable because they are the ones paying afterall. Consumers who own the report are just along for the free ride. Of course, this can only be enjoyed if a creditor or lender orders your credit score. But in the end, you probably get the better part of the bargain – a knowledge of your current credit score and how you can possibly improve it for future use. Not only that, you get to understand first hand how lenders actually decide based on your creditworthiness.

Why monitoring your credit report is more crucial than ever

In this day and age, monitoring your credit score is important for the simple reason that it says a lot about your financial health. Although it does not paint a picture of your savings or actual wealth, it gives others a glimpse of how responsible you are when it comes to your debts.

The Q3 2013 report coming from TransUnion indicates that consumers are displaying better credit behavior compared to 2012. In a press release published on MarketWired.com, the credit bureau reveals how the credit card delinquencies are up to 1.36% an increase from 1.27% in Q2 but a decrease compared to 1.50% in Q3 of 2012.

It is hard to say if credit monitoring has a direct effect on this but it is one of the ways that you can display being more responsible. If you follow what is on your credit report, you will know how you can possibly avert any impending financial disaster. It might be unknown to you that someone else is borrowing under your name. Or you could be unaware that your debts have grown more in the last few months. These knowledge will help you understand and take steps to counter any crisis that could be brewing in the horizon. Although it may not be everything, it is one of the things that you can do to keep your financial obligations from getting ahead of you.

In a blog article from Wall Street Journal, it is revealed that Millennials are struggling when it comes to their credit score. Those who are between the ages of 19 and 29 have the lowest credit score in the country. This is because a lot of them stayed away from credit cards and they have shorter credit histories. They are also unable to take on more assets and loans – probably because they are saddled with huge amounts of student debt.

With the student debt pulling them down, it is highly advised that Millennials seriously consider building up their credit score to enable them to acquire more assets. There are purchases like homes that are too big to be bought in cash and a loan is oftentimes inevitable. Preparing their credit score for this will help them get a low interest loan that can save them a huge amount of money in the process.

Financial management equals good credit behavior

What you have to realize is that it is not really being in debt that keeps your credit score high – it is how you treat that debt that is measured and graded by this score. In order to be considered a financial success, you want to have all the opportunities available to you when you need them. One of the ways to assure this is to make sure that you have a good credit score. And that can be greatly helped if you implement regular credit monitoring in your life.

Financial management means being wise with money but it also implies that you need to be aware of the factors affecting your financial health – like your credit score. You also have to know the tools that are needed to help you take care of this aspect in your life. As soon as you understand the basic principles of proper money management, you will understand how your should be behaving when it comes to your finances. It just involves three simple rules.

  • Budget your money. This will help you live within or even below your means to avoid debt accumulation. A budget plan will help you prioritize expenses to ensure that the important ones are funded – like your credit obligations. It will keep your credit score high if you are never late with your payments.

  • Make smart spending choices. This does not only involve skipping the unnecessary purchases that you cannot afford. It also means deciding not to buy something even when you have the cash to pay for it. Sometimes, there are expenses that are better off sent towards your debt payments for faster debt relief.

  • Save for your emergency fund. In some cases, people who do not have an emergency fund are forced to take from their debt payments to finance an unexpected expense. Try not to make this happen by stashing up on your reserve fund.