Tag Archives: credit

Wells Fargo Offering Free Credit Check

UPDATE: This is being offered again between March 1st and April 15th, 2013.

I like free things. I like free samples at the grocery store. I love buy one, get one coupons for dinner at my favorite restaurants. But I especially love to get freebies on things I not actually want to have, but need to have. And when it comes to a credit check, I’m one of those people who needs to have it.

Free Credit Score

I’ve mentioned before that Lauren is a Wells Fargo account holder. And if you’re a Wells Fargo customer like her, then you’re eligible to receive your credit score – for free – any time between now and November 15th.

It’s part of the bank’s partnership with the American Bankers Association, which is sponsoring its 10th annual “Get Smart About Credit” Day on October 18th. Usually, you’d have to pay Wells Fargo for your credit score or credit report – but not now! Just go in to your nearest Wells Fargo branch and get a unique code from one of the bankers; you’ll use that code to get access to your credit score and report for free online.

Free Credit Check

Wells Fargo is also offering customers a free credit check between now and November. The company has pledged to spend 60,000 hours volunteering their services to educate young adults about their credit. Topics to be covered include understanding how your credit score is calculated, how your credit score impacts your borrowing power, and how to manage your finances so as to maximize your credit score.

Why You’ve Got To Check Your Credit

If you’ve ever gone to apply for a home or auto loan, only to have your application unexpectedly denied, you know why it’s so important to check your credit score regularly. But knowing your credit score isn’t enough – those three numbers, compiled by Experian, Equifax, and TransUnion, the three credit rating agencies, are just a snapshot of your credit’s health at any given time.

The government’s Free Credit Reporting Act requires those credit agencies to give you a free copy of your credit report once every 12 months. There are a lot of companies out there that pledge to give you access to a free copy of that report – remember that catchy jingle for FreeCreditReport.com? – but only one, AnnualCreditReport.com, is authorized by the government to do so. The other “free reports” often come with strings attached, like monthly credit monitoring services or identity theft coverage.

Your credit report is where you’ll see the real dirty laundry of your finances. Habitually late on a loan? Forgot about a credit card you took out in college? Your credit report has it all. But remember – it may also have mistakes, like loans you paid off but weren’t removed by the lender, or may even show evidence of identity theft or fraud. I’ve gone over my credit report annually for years on my own, but the chance to go over it with finance professionals is a great opportunity.

So, if you are a Wells Fargo customer, be sure to visit your local branch in the coming weeks to take advantage of these freebies.

What’s The Difference Between an Authorized User and a Joint Account Holder?

After Lauren and I joined our finances, next up were the credit cards. Lauren was pretty excited to have access to my credit, and I was happy to have someone legally responsible for our monthly credit card balance. Right?

I called up our credit card companies and ask to add Lauren to my account. I received the same question from each of them:

Would you like to add your wife as an authorized user or as a joint account holder?

What exactly is the difference? And which one was best for us? This decision can have a big impact on both partners credit report and credit scores.

Authorized User

  • An authorized user can use the account to make purchases but does not share any of the financial responsibility to pay off the card.

Valid authorized users have their data sent to be used in credit reports and calculated in FICO’s credit score. A few years ago, they made changes to their scoring algorithm to only authorized users whom they deemed to be legitimate. Some people were ‘piggybacking’ on account holders that they had no relationship with (very often, a company that charged customers to boost credit scores) to improve their credit scores and increase their credit age.

How does FICO determine who is a legitimate authorized user and who is illegitimate user? Legitimate users include spouses, children, and parents, along with anyone who would have a legitimate reason to share access with the primary account holder.

I have been an authorized user on my parent’s credit card for several years, so my credit age is actually older than I am!

Joint Account Holder

  • A joint account holder is equally responsible for the balance of an account and is legally liable for an amount due.
This means that if one person does not make a payment, it affects both people. So if I missed a payment for some reason, Lauren would also feel the pain of a missed payment. Therefore, you should only be added as an joint account holder if you are prepared to be responsible for paying the card yourself. Otherwise, your credit could be negatively affected should the account not be paid.

Either Options Is Good

It’s important to note that the entire history of the account will be sent to the credit bureaus. That means that the last 3+ years of positive history on my credit cards will be shared with Lauren. Score!
Since the credit score calculation would only improve Lauren’s credit score by increasing her credit limits, pushing down her credit utilization rate, and improving her credit history, we definitely wanted Lauren to be included on this account. But whether we added her as an authorized user or a joint account holder, she would receive all of these benefits.
We’ve already merged our bank accounts, and we’ve started paying off her student loans, too. Having her added as an authorized user felt too much like me paying her credit card bill and we really like the idea of being equal partners, so why not have her be liable for our debt, too? We decided on adding her as joint account holder, we are true partners, both in our earnings and in our spending.

For us, there were only positives to adding Lauren as a joint account holder. If this account wasn’t one that was paid off each month or if Lauren already had several credit cards, we probably would not have added Lauren so that it would not negatively impact her credit score or credit report.

Save Money by Avoiding Card Spending on Vacation

In the current financial crisis, debt is something which we are all too aware of and many people have noticed their level of borrowing creeping up. Although unsecured debt continues to rise, consumers are realizing that some forms of debt are very easy to obtain and even easier to get into trouble with. However, it is interesting to note that spending on credit cards appears to be slowing down as people try to bring down their levels of borrowing. This makes perfect sense because many are trying to use financial products that provide the best value for money.

Spending on Vacations

One area in which consumers are definitely seeking to keep their spending under control is their vacations. Traditionally, a credit card has been seen as the best way to spend pay for things while on vacation and is certainly the most popular. There are good reasons for this, with the main one being convenience. There are also some safety aspects such as being able to get a card replaced in the event of theft or loss and also the legal protection offered by card purchases.

Unfortunately, there are also costs associated with using most cards abroad which can really mount up to become a nasty surprise when a holiday is over. Many card holders will not check the specific provisions of their card provider for using the card abroad. But all manner of additional charges and fees can appear in the small print.

The cost of using an ATM overseas can really mount up quickly, with some credit-card companies charging a fixed fee of a few pounds per transaction. Many vacationers will not be aware of this until they return home and see their statement. Withdrawing cash on a credit card often attracts a very unfavorable rate of interest, one that it much higher than the one that is applied for purchasing something at a retail outlet. The exchange rates used for credit-card transactions are also often
much worse.

But perhaps the biggest danger of using a credit card while on vacation is spending more than you planned and then finding yourself unable to cover the repayments when you return home. Credit cards are one of the most expensive forms of unsecured borrowing and so a holiday can end up costing a great deal more than it needs to. Little wonder then that consumers are looking for other ways to finance their holiday spending.

What Are the Alternatives?

Credit cards are not always a bad choice. There are a number of prepaid options on the market which allow the consumer to treat their plastic as a savings account by pre-loading their spending money on to it. This can be done in several different currencies and means that holiday makers will only be spending the actual amount they have taken with them.

Those planning a holiday should also investigate other finance options to cover the cost. Fixed-rate, reasonably short-term loans can be far more cost effective in the long run than credit cards and they help to avoid the risk of getting into unaffordable debt.

This guest post was submitted by Francesca who writes for comparison site SO Switch. If you’re looking to save money, she recommends using a comparison site to ensure that you’re getting the best deal on essentials such as insurance and energy suppliers.