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17% of Americans Might be Missing Out on a Key Credit Card Benefit

April 28, 2015
Credit Card Basics, Credit Cards
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Everyone loves getting free stuff. But the key to taking advantage of a free offer is knowing that it’s available in the first place.

Consider this: Based on the National Foundation for Credit Counseling’s 2015 Consumer Financial Literacy Survey, sponsored by NerdWallet, 17% of respondents marked “not sure” when asked if their credit card gave them access to a free FICO score every month.

These results show that many Americans might be missing out on using an important financial tool. Here’s how to avoid being one of them.

Why free FICO scores matter

Your FICO score is a three-digit number, ranging from 300 to 850, that represents your creditworthiness. The higher your score, the easier it will be to qualify for credit, and on good terms. Although there are many credit-scoring models, the FICO score is the most commonly used by lenders.

Consequently, seeing your FICO score month over month is helpful for monitoring your overall financial health. When you’re able to see the same score lenders will see as they evaluate a credit application, you’re better able to prepare for getting a loan.

And don’t forget, bankers aren’t the only folks who might someday check your credit. Staying on top of your FICO score will give you a sense of where you stand when a potential landlord, insurance agent or employer reviews your account or application.

Finally, tracking your FICO score could help give you an early warning if you’re the victim of identity theft or a credit reporting error. Because your FICO score is created from the data on your credit report, it will reflect updates to that information. A big, unexpected dip in your score one month is an indication you need to check your credit reports immediately for suspicious or erroneous activity.

>>More: Which credit cards offer free FICO scores?

Does your credit card offer a free FICO score?

You can call your issuer to ask if it provides free FICO scores. But if you have a consumer credit card from one of the issuers listed below, you likely have free FICO score access through your online account or on your monthly statements:

  • Barclaycard
  • Discover
  • First National Bank
  • Citi
  • Bank of America
  • Chase (only for customers with the Chase Slate®)

List current as of April 2015

>>More: Credit card features you wish you had

How to use your free FICO score

The first thing you should do if you discover you’re getting a free FICO score is assess it. Although every bank sets its own lending standards, FICO score ranges are typically defined as follows:

300-629: Poor credit

630-689: Average credit

690-719: Good credit

720 and above: Excellent credit

Next, take steps to improve your score. Folks with excellent credit can keep up the good work. But if your score falls below 720, use these tips to pump it up:

  • Pay your bills on time. This is the best thing you can do to give your credit a boost.
  • Monitor your credit card balances carefully throughout the month. If you start using more than 30% of your available credit at any point, on any card, make a payment immediately.
  • If you’re carrying credit card debt, pay it down as fast as you can.
  • Limit new credit applications.
  • Wait at least six months between credit card applications.

>>More: How to build credit

Finally, monitor your progress over time. You probably won’t see a big, immediate improvement, but establishing new habits should cause your credit scores to rise over time. As long as you keep up with your new money routines, you’ll be moving toward excellent credit.

Information related to the Chase Slate® has been collected by NerdWallet and has not been reviewed or provided by the issuer of this card.

Lindsay Konsko is a staff writer covering credit cards and consumer credit for NerdWallet. Follow her on Twitter @lkonsko and on Google+.

Image via iStock.