For almost all people, a healthy credit score is the sign of a healthy financial life. A great credit score can keep your financing costs low (which is important if you plan to take out a mortgage in the future), and it can reduce your costs on car and homeowner’s insurance. It will also help you avoid annoying costs like having to pay security deposits for utilities when you move.
So what does it take to make a great credit score? The answer boils down to four simple practices:
- If you have any debt, make your payments on the debt on time, every month.
- Seek opportunities to increase your available credit limit by opening credit cards that charge no annual fee.
- If you take on debt (especially credit card debt), pay it off as fast as possible.
- Keep an eye on your credit report, and report fraud or mistakes right away.
The first three steps are fairly easy to follow, but the fourth step can be a little bit annoying. After all, pulling your credit report from AnnualCreditReport.com is surprisingly cumbersome, especially if you move frequently (like so many recent graduates tend to do).
That’s where tools like CreditWise® from Capital One® come into play. In this article, I’ll explain how the free tool works, and whether or not you should use it.
- Monitor your credit for free
- Utilizes VantageScore 3.0
- Get add-on if you already use Capital One cards
What Is CreditWise® from Capital One®?
CreditWise® is a completely free credit monitoring app. The app gives you access to your VantageScore 3.0 credit score (a good proxy for the FICO Score used for credit card applications) and your full TransUnion credit report.
Anyone over the age of 18 with a valid Social Security number can use the CreditWise app.
In practice, the CreditWise app is fairly similar to apps like Credit Karma or Credit Sesame, but I want to give credit where it’s due. The interface for CreditWise® is better than the interface for its competitors.
Using the CreditWise app will not hurt your credit score, and Capital One uses bank-level security features to keep your information safe. That doesn’t mean you’re immune from a hacker’s attack (the Equifax data breach taught us that), but it does mean that Capital One has as many safeguards in place as it can.
Does CreditWise® Offer Any Special Features?
CreditWise has similar features to leading credit monitoring apps, but it isn’t a copycat of the others. Its most important free feature is “Dark Web” monitoring. If your name or Social Security number shows up on the Dark Web, CreditWise will send you an alert. It doesn’t promise to “fix” the issue for you, but it can put you on high alert.
CreditWise’s other unique feature is a credit score simulator. Both Credit Karma and Credit Sesame offer credit score simulators, but the CreditWise simulator seems more intuitive to me. I like that it helps people understand the effects of their credit decisions before they take out a new loan, pay off a debt, or make some other dramatic move.
CreditWise also updates your credit score and report on a weekly basis. This isn’t exactly a necessary feature since most banks only report to the credit bureaus once per month. However, if you’re a travel hacker, or trying to apply for 0% promotional credit cards (to reduce your credit card interest rates), this can be important. It can show you whether or not frequent applications are destroying your credit.
Final Take on CreditWise® from Capital One®
If you’re not monitoring your credit, I recommend starting to watch your credit score and your credit report today. CreditWise® offers a super-easy way for you to get started. Plus, its credit score simulator and other educational features can keep your credit score moving in the right direction.
People who already have a favorite credit monitoring app don’t need to switch apps. However, if you aren’t keeping tabs on your credit, you need to. Invest five minutes to download the CreditWise app, and your credit score (and your future savings) will thank you.
Credit Score Reporting
CreditWise is a free credit monitoring tool.
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page or on his personal site RobertFarrington.com.
He regularly writes about investing, student loan debt, and general personal finance topics geared toward anyone wanting to earn more, get out of debt, and start building wealth for the future.