The Discover it® Cash Back has added a new perk: customers can view their FICO scores on their monthly statements for free, helping them to spot errors and keep an eye on their financial fitness. A good credit score is an important component of leading a financially healthy life — it determines so many important things, like your ability to get a mortgage or a car loan.
But the truth is that staying on top of your credit history and score is kind of a hassle. In an effort to make credit watching easier for its consumers, Discover has now started printing their credit scores on it customers’ monthly bills, joining the a handful of other credit card issuers in promoting credit scores, not just cards.
What does all this mean for you and me? Read on for more about this important change sweeping the credit card – and credit monitoring – business.
Giving FICO scores away
The credit reporting and monitoring system in the U.S. has traditionally been complicated and difficult for consumers to access. Prior to the Internet, many people only knew their credit scores when they went to a bank to apply for a loan; this was frustrating to people who were surprised (often in a bad way) by unexpected changes to their credit histories. Though federal law entitles everyone to a free copy of their credit history, it doesn't grant access to the all-important credit score.
Online credit services like Credit Karma have sprung up to fill the gap. As of last month, however, Discover is providing greater ease of access by printing it card customers’ FICO credit scores on their monthly bills. FICO scores are the most widely accepted credit scores, so this number can serve as a more accurate representation of customers’ credit than other scores.
Discover plans to give all of its customers printed credit scores on their bills in the next couple of months, and in a similar move, two other credit card issuers – Barclaycard and First Bankcard – have begun allowing customers to free access their credit scores online. It is expected that other credit card companies will soon be offering a similar feature.
These free FICO scores are a huge change for customers wishing to keep tabs on their credit on a month-to-month basis. In the past, most credit card companies offered a credit monitoring service that would alert customers to changes to their credit history, but this was costly. Now, consumers can keep track of their credit on their own and at no cost. Moreover, it might even provide an incentive to make on-time payments and stay within credit limits: if people receive quick feedback that a high debt utilization ratio has dropped their FICO scores, for example, they might be less likely to rack up a large balance.
A decent card gets better
Providing Discover it® Cash Back customers with a free credit score every month is nice feature to add to a credit card that is, overall, a decent cash back card. For example, the Discover it® Cash Back already offers:
No foreign transaction fee
$0 annual fee
1% cash back on all purchases, and 5% cash back on rotating bonus categories up to $1,500 spent per quarter
0% intro APR for 14 months on purchases and balance transfers, and then the ongoing APR of 11.99% - 22.99% Variable APR
Bonus categories must be activated quarterly to qualify for the higher rate. The process is simple, but you'll have to remember to complete that extra step.
There are a lot of good cash-back credit cards on the market today, but if credit monitoring is important to you, getting a free monthly FICO score could be the tipping point that makes the Discover it® Cash Back the best card for you.
Does this mean I don’t have to pull my credit report anymore?
No. Even if you’re getting a free credit score every month from your credit card, it’s still important to pull your credit report once a year and review it carefully.
This is because, in addition to your overall score, most lenders look at your credit report, too, when deciding whether or not to give you a loan. This means that making sure that your credit report is accurate is crucial, so don’t let monthly getting free monthly credit scores make you complacent.
The takeaway: getting a free credit score every month on your Discover it® Cash Back bill will make it much easier to keep track of your credit. Just be sure that the other features provided by the card are those you’ll be likely to take advantage of before signing on.