In today’s digital world, information is available at your fingertips. There are health apps that keep you updated on your exercise routine. There are maps to ensure you are on track to reach your destination.
There are apps for credit scores that keep you updated on your debt payments. They can help you monitor your credit score to have a healthy credit life.
Understanding your credit score can get you started on the right footing and help you avoid a financial crisis. There is more to credit score apps than meets the eye.
In this article, we will explore what your credit reports tell you. We will also see how you can use the best credit score apps the UK has to offer to your advantage.
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Three major credit bureaus in the UK
A credit score can determine where you live and work, and what insurance policy you can avail of. It can also determine how much credit you can get from banking and financial institutions.
Three main credit rating bureaus – Equifax, Experian and TransUnion – monitor how timely or delayed your bill and loan payments are. They look at your payment pattern and other factors and give you a credit score between 0 and 1000.
A higher credit score means you are prompt in all your payments, not just debt payments.
The average credit score in the UK is ‘Fair’ across all three credit reference agencies, with an average Experian score of 759 and an average TransUnion score of 610.
How does credit score work?
Your credit score can work both ways.
- If you are regular on payments and only take credit that you can handle, your credit score will increase. When your landlord, employer, insurer, bank, or business supplier does a credit check on you, they will see you as a creditworthy person and offer good terms at a lower rate.
- On the contrary, if you miss payments for several months in a row, it will affect your credit score. A bad credit score can have a cascading effect. One bad loan lead to other lenders charging higher interest rates, and all favourable terms are off the table.
It could also lead to the rejection of your loan application. You can even consider going for loans like easy loans, emergency loans, etc., to pay your emergency bills if you are falling short of cash. This can avoid negatively affecting your credit score if you make the repayments on time.
Before taking a debt, always make sure that you have a stable job with regular income. That you can afford the repayments as defaulting on repayments can lower down your credit score.
Starting your credit journey with the right credit score is important since it is easier to maintain a good credit score than improve a poor credit score.
Why do you need to monitor your credit report?
It is a healthy practice to check your credit report from all three credit reference agencies, as each uses its sources to get data. Check the credit report for outdated addresses or bank account numbers, as inactive accounts could affect your credit score.
For the same reason, cancel unused credit and store cards. Also delink any joint accounts, as your partner’s financial habits and credit history could impact your credit score.
When you monitor your credit report frequently, you can also keep a tab on any fraudulent activities, like an anonymous person getting a credit card in your name. You need not worry about checking your credit score often, as the checks don’t get recorded.
A responsible practice is to check your credit report before applying for any form of credit. If there are any discrepancies, it is better to get them rectified. When you know your credit score and have done your research, you can get a good deal with favourable terms.
How can credit score apps help you in your credit journey?
There are many credit score apps, each having its strengths and limitations. Some credit monitoring services and apps show all three reference agencies’ credit scores, while some give alerts only on major changes. The best credit score app for you depends on your objective.
How to identify the best credit score app?
We scanned through the top 11 credit score apps and shortlisted some. The first layer of the filter was the availability of three basic features that every credit score app must have:
- Provide updated credit score notifications and a credit report summary from one or two of the three major credit bureaus.
- Provide assistance and personalized suggestions on how to improve your credit scores.
- Available on both Google Play and Apple stores.
The second layer of filtering was done on a particular feature that the app provides for five major use cases; to manage credit, make a credit decision, find an accurate credit score, and improve your credit score.
Using this methodology, we have identified four credit monitoring apps that are best in our opinion for the particular objective.
Best free credit score app for managing credit
Credit Karma
Credit Karma is one of the best free credit score apps for those of you wanting to manage your credit score by adopting healthy financial habits. The credit scoring system used by Credit Karma is quite close to your actual FICO score.
- Credit score:
Credit Karma updates your information from TransUnion and Equifax credit report every seven days. It provides an eligibility checker to update you on the type of loan you can avail of.
It gives you an overview of the detailed Experian and TransUnion credit report, highlighting the points that could affect your credit scores, such as credit card utilization and payment history.
If you are looking for an Experian credit report, you’ll have to look elsewhere.
- Additional services from Credit Karma:
Credit Karma not only helps you spot the issue but also acts on it. TheID monitoring feature helps you detect if your information has fallen prey to a data breach, and the app allows you to change your passwords.
But remember – that is all Credit Karma can help you with in case of fraud. It does not provide any additional fraud remedies.
Other features of Credit Karma:
- The app sends alerts on significant changes to your credit reports, such as a change in credit scores.
- It provides personalized advice on improving your credit score, using your credit wisely, and disputing errors in your report.
- It also makes recommendations about credit cards, loans, and other financial products, telling you which are likely to be approved and how different financial decisions will affect your credit profile.
These insights make Credit Karma ideal for managing credit reports, but the upsells of financial products might be negative for some users.
Best credit score monitoring apps for making credit decisions
CreditWise
CreditWise app from Capital One, is one of the best free apps to make credit decisions while keeping your credit score in check.
- Credit score:
CreditWise app is available for everyone whether or not they are customers of Capital One. The app updates your TransUnion VantageScore 3.0 credit score every week but does not provide credit reports from other bureaus.
Why CreditWise aces in credit decisions?
This free credit score app offers a credit score simulator. When you have to make a credit decision, you can use this feature to run a simulation of the options in your hand, and the simulator will tell you the likely impact it will have on your credit score. This way, you can opt for a credit that meets your requirement with minimal impact on your credit score.
Other features of CreditWise:
- The app will also give industry-standard alerts if there are any critical changes in your credit score.
- It offers personalized suggestions to improve your credit score.
Best credit score app for accurate credit score
Experian
If you are looking for accurate credit monitoring, the best option according to us is a paid option of the Experian app. With so many free credit reports options available, why go for a paid report? Here’s why:
- Credit score:
Experian collects your payment history from financial institutions and lenders and prepares your credit report. Since it’s coming right straight from the source, the credit score is accurate.
The free version of the app will give you the Experian credit score, but you have to pay ÂŁ14.99 a month for a complete credit report.
Such a paid version is a good choice when faced with a financial crisis or in preparation for applying for a major loan like a mortgage, or for a credit card from credit card companies, where accuracy is of prime importance.
What is unique about Experian?
Another remarkable feature of the paid version is scoring influencers. This feature highlights things that could impact your credit score, thus helping you understand the dos and don’ts of credit. Moreover, you can see your entire credit history timeline at a glance.
Other features of Experian:
- The Experian app compares loans and credit cards to find the ones where you have a high chance of getting approved.
- It provides alerts on critical changes in credit score.
- It offers materials like tips, videos, and articles to help you improve your credit score.
Best credit score app to boost your credit score
Pave
In our opinion, Pave is one of the best apps if you are tight on finances but want to improve your credit score.
- Credit score:
Pave works with all three credit bureaus to help users learn about their credit scores. Credit monitoring experts help you understand what is impacting your credit score and give personalised credit fixes to improve it.
The app tracks all your bills across all your accounts to enable you to make timely payments.
- The best use case of Pave app:
What sets Pave apart is its ability to help build your credit score by giving you a personal loan to pay your bills if you fall short of cash. However, such personal loans are subject to approval.
Pave is the best credit score app for people looking to improve their bad credit score. This app may not help if there is debt escalation or declared bankruptcy in the past 12 months.
Around 16% of the adult population has a debt problem. The average total debt per adult in the UK stood at ÂŁ32,053 in 2021. Taking debt and being prompt with repayment can help you build a good credit score.
Never miss a payment in your life even if you have bad credit. If you are employed, make sure to save money in your savings or emergency fund. This way, you can pay your bills on time and improve your credit score.
The above credit score apps help you improve your financial health by increasing your understanding of your credit score and sharing good credit habits.
Disclaimer: The information given above is provided for reference only. This is not financial advice. These are the best apps in our own opinion and might differ people to people. Also, we are at no point promoting these apps. Please explore these apps carefully before using them.