In doing this, Barclaycard have one-upped Tesco Bank who have also just announced that they too will be offering customers free access to their credit scores, but only customers who hold one of their ëFoundation ‘ credit cards.
Barclaycard are providing the credit scores through Experian and they will be available both online and, from next year onwards, through the company ‘s self-titled app. They have made the decision to do so following a study they conducted that showed that only 26% of people actually knew what their score was in the UK. While customers will only have access to the credit score (and not the full breakdown and report that is available with Experian ‘s paid for service), each customer will be offered advice and commentary based on their score and how to improve it if needs be.
The score, which is based on customers past dealing with credit, loans and bills, is calculated as a number from 0 to 999, with ratings broken down as follows:
0-560: Very Poor
Any missed payments for anything from credit card repayments to electricity bills will count against a customer ‘s credit score, as will any defaults. And the same goes the other way around; payments made consistently on time will improve it.
Those who have a limited history with credit, such as those who have never taken out a loan before, will find that their credit score won ‘t look great.
A positive credit score is essential in order to get the best credit or loan products including cards and mortgages, and a poor credit score can be incredibly prohibitive not just in getting the best deals, but often in terms of actually getting the product at all.
As such, being able to access and know how to improve your credit score is important. Until now (and even still now if you ‘re not a Barclaycard customer), you would have had to pay a subscription to one of Experian, Equifax or Callcredit. Barclay ‘s study showed that only 39% of those asked had actually done so before.
The managing director of Barclaycard, Manoj Piplani, said that “customers have told us they recognise the importance of their credit score but, for a variety of reasons, just one in 10 check regularly.”
He went on to emphasise the importance of credit scores throughout one ‘s financial life, not just when applying for mortgages.
“Everyone should take time to manage and understand their credit score” he said, “it ‘s not only an important deciding factor on whether you can get a mortgage, loan or credit card, but can affect your access to a much wider range of products and services including mobile phone contracts, monthly car insurance, bank accounts and more.”