Checking your credit score has become incredibly easy in recent years. There are a number of websites and apps that can offer you a glimpse of your credit health, one of them being CreditWise from Capital One.
Capital One is a credit card company that offers their accountholders a view of their credit. Their CreditWise service was launched in 2014, and it’s a popular product that has now been opened up to the public. The real question is, however, is CreditWise worth getting? More importantly, is it accurate?
How CreditWise Works
You don’t need to be a Capital One cardholder to get CreditWise, and it’s free. The product is available to anyone who’s over the age of 18 and has a valid Social Security number that can be matched to a credit profile. Because CreditWise uses a “soft” credit pull, your score won’t be affected by it. You can look at your credit report on a daily basis with no ill effects to your credit score.
Scores are updated weekly, and you’ll also be notified if there are any changes to your credit, such as a new inquiry you didn’t know about, which could signal someone is trying to obtain credit in your name. In addition, you can take a look at the individual factors that make up your score, such as the number of on-time or late payments you have, or how many accounts you’ve accumulated. That means you can see exactly how each one affects your score.
You can also use CreditWise’s simulator to test various scenarios. For example, you might be interested to see how much your credit score would improve if you paid off a credit card, or if you were late on a credit card payment.
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The benefits of CreditWise are many; the ability to monitor your credit profile so closely is critical in helping you maintain a good credit score. With identity theft on the rise, it’s important that you pay attention to what’s going on with your credit to stop any fraudulent activity as soon as you see it. The weekly updates mean you won’t be caught unaware by someone trying to get credit in your name. Also, the simulators can help you not only understand your current situation but plan for financial decisions as well.
Things to Consider
CreditWise, however, isn’t perfect. Rather than using a Fair Isaac score, or FICO, CreditWise uses the VantageScore 3.0 to score your credit profile. The VantageScore model was developed by the three credit reporting bureaus themselves (Experian, Equifax, and TransUnion), but, 90 percent of lenders use the FICO score to approve or deny credit to applicants.
That means your score could be great on CreditWise, but lower on FICO, or the other way around. The good news is that seven of the ten largest banks in America use the VantageScore, which means if you are looking for credit from one of them, your CreditWise will help you know exactly what to expect when you apply.
CreditWise’s accuracy is solid if you’re looking only at the VantageScore model, but it only offers a score from one credit bureau. In order to really understand whether you would be approved for credit under a FICO score or the other two bureaus, however, you may need to look past the score CreditWise gives you and look at the risk factors it outlines. If you have late payments, you may have a hard time getting a low interest rate if you get approved at all, and sometimes it only takes one tardy payment to make it difficult to get additional credit.
For those who are just starting to get a handle on their credit, Capital One’s CreditWise is an excellent tool. It offers a way to start understanding how your credit report is calculated, helps you simulate various credit decisions, and can alert you to any fraud on your profile. Just make sure you also understand its limitations, and plan accordingly.