How Setting Up Experian Credit Score Alerts Can Help You

Lyn Ridley - 2020-10-17T21:00:00.000Z

Your credit score changes frequently, whether due to late or on-time payments, applications for new credit, or increases in your card balances after making purchases.

Experian, which is one of the three major credit bureaus, recently launched a FICO score tracking service that will alert you by email whenever your numbers move up or down. In this article, we’ll cover how the service works and what benefits you could enjoy by signing up.

How Real-Time Alerts Can Help

Applying for your free annual credit score is a great idea - but it can be time consuming. Being alert to changes in your score as they happen will help you manage your debt repayments like a professional.

Keeping Your Balances Low

Credit card balances contribute to credit utilization - the percentage of your maximum available balance that you’re currently using - and this is the second biggest factor in your FICO score.

Credit utilization counts 30% toward your score. By keeping this figure under 30% (or carrying no more than $300 on a $1000 credit limit) you’ll help boost your creditworthiness.
Receiving real-time alerts when your balances are too high and your score starts to drop will remind you to make an extra card payment before the due date or pay down your balance altogether.

Timing Credit Card Applications And Inquiries

Another important factor in your creditworthiness is the number of new applications you’ve made recently. This makes up 10% of your total FICO score and you can boost your numbers simply by applying for new accounts at the right time.

If you apply for multiple types of credit - like a loan, vehicle financing, and a credit card - all at once or within a few weeks of each other, your score may drop. This is because lenders interpret this type of action as a sign that you’re in financial distress.
On the other hand, it’s also beneficial to have a mix of different credit types on your record - as long as you manage them well and make your payments on time. This factor also counts 10% toward your score.
Keeping track of changes to your score as you apply for various types of credit will help you decide whether to go ahead with your next application or wait a while until your numbers come back up. The ideal period to wait in between different types of credit applications is at least three months.

Helping To Decide If And When To Close Old Credit Cards

The length of your credit history counts 15% toward your FICO numbers - and you can increase your score by keeping your credit card accounts open and in good standing. Credit score alerts will help you time this decision.

From the bureau’s point of view, the ideal credit card account is one that has been open for many years, paid on time, and currently has a low balance.
This means that you can pay down your credit card, use it for a few small purchases a month, and clear the balance on or before the due date - and keep it open to raise your FICO score.
One thing to consider when using this strategy is the cost of annual card fees. You may not want to keep too many cards open if you’re paying yearly maintenance fees on each one.
In this case, you’ll want to either have your provider change your card to a no annual fee option (if they have one) or close your newest credit card account. This will affect your credit history score the least - but make sure that the total remaining balances on your other cards are sufficient for your needs.

Outcomes

Using Experian’s credit score alerts to keep your debt management goals on track could be an ideal solution - especially if there’s no time in your busy schedule to check credit reports. Here are some of the positive results of using this strategy.

Low Credit Balances: With a credit utilization ratio of 30% or less, you’ll be optimizing one of the biggest factors that go into your FICO score.
Better Timing Of Credit Applications & Account Closure: Since the specific week or month you choose to take actions like these affects your score, you’ll be able to time them precisely and not have your numbers drop needlessly.
Overall Higher Credit Score & Access To Lending Products: The final result of tweaking all your FICO score factors should be a higher score - and if your credit goes from fair to good or good to excellent, you could enjoy higher account balances, more approvals, and lower APRs.

Conclusion

Boosting your credit score is more than possible when you have the latest FICO data at your fingertips - and that’s what Experian’s Credit Score Alerts will deliver.

You’ll be able to keep your balances low, time your new account inquiries appropriately, and decide which credit card accounts to keep open. These are proven strategies that have helped millions of Americans boost their credit scores.