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Monday, January 25, 2016

Money Culture: Pay Attention to Your Mobile Banking App

The fate of your credit could be right at your fingertips.

Figuring out how to build your credit shouldn't make you anxious. Did you know that you can find tips on anything related to your credit at your financial institution's website? And if use your bank's mobile app there are usually articles and videos just waiting for you to click.

The other day I took notice at my Bank of America Mobile App. And I was floored by the wealth of information it had under its Better Money Habits tab. 

One of the topics that sparked my attention is the video it had on building your credit. The whiteboard presentation explained everything from the meaning of a FICO score to the names of the three main credit reporting agencies. 

It even gave a transcript to go along with the video. (I pulled some of the information from the transcript and inserted it below.) 

If you don't feel like reading then click on the following image, which will take you directly to the informative video.

 BoA Better Money Habits

The following piece is a courtesy of BoA's Better Money Habits. *Edited for clarity and a shorter read.
What's a credit score?
  • Your credit score is a number, the most common being known as a FICO score, that helps evaluate how much of a risk it is to lend you money. It simply shows how responsible – or irresponsible you are with your finances. When it’s good, it can help you get access to lower rates which enables you to borrow for both short-term emergencies and longer-term bigger-ticket items. 

  • How bad credit can affect you in areas of your life you wouldn’t even expect.
    • Employers and landlords may look at your credit score to see if you’d be a responsible employee or tenant.
    • Some car insurance companies may also see a direct relationship between your credit score and the likelihood of you being in an accident. And in certain states, this even means you’re charged a lot more for insurance. 
5 Tips to build and protect your credit score

  1. Excellent payment history —That goes for all of your bills on your credit report — not just your credit cards. This one’s a biggie because it makes up a decent portion of your overall score. Creditors want to know that you pay on time, every time, even if it’s just the minimum. And consistency goes a long way, so pay your bills when they’re due and never skip payments. One easy way to stay on top of things is to set up automatic payments for the fixed costs like your mortgage.
  2. Keep tabs on how much you owe. Simply stated, it’s the amount of debt you have compared to the amount of credit that’s available to you. It’s a good rule of thumb to keep your total debt lower than the overall credit available. The lower the better. Because if you get too close to your limit, creditors may think you’re biting off more than you can chew or that you are supplementing your income with credit. So whenever possible, keep this debt-to-credit ratio as low as possible.
  3. Managing your credit — Creditors want to see that you’ve been managing credit for a long time. Your credit history shows how long you have been using credit, how you’ve handled that responsibility, and how responsible you’ve been. Establishing a good long history means you’re an old pro at borrowing or managing money and are likely to repay what you borrow.
  4. How your score is affected — A good mix will span different types of credit — from a mortgage to credit cards to installment loans like car payments, which are repaid over time — and can help you improve your overall score. This is because it proves you have experience handling a variety of account types instead of having a lot of accounts in just one area. And when it comes to balances, lower is always better for your score.
  5. Creditors are going to do their research. —Creditors want to know what you’ve been up to lately. They’ll look at recently opened accounts and where you’re inquiring about credit. Even if you’re relatively new to credit or were just thinking about borrowing, they want to see who gave you credit and when. 
BONUS TIP: Applying for too much credit can be seen as high risk because it looks like you’re desperate for loans. Take department stores for instance. Doesn’t it seem like they’re always offering you 20 percent off if you open up a credit card? Although it could save you some cash right there at the register, think about the possible long-term consequences of opening, and paying for, yet another account. 

Credit Reporting Agencies 101

Now that you know what makes up your credit score, it’s important to check your credit reports because that’s how your credit score is established in the first place. There are three national credit-reporting bureaus that you should know: Experian, TransUnion and Equifax. And you’re entitled to a free credit report from each of them every year, which you can request from But you should know that only the reports themselves are free and that there is a fee to get your actual credit score. Also be sure you check your reports for accuracy and take care of any problems ASAP. 

In the end, the best thing you can do to keep your credit score healthy is to pay your mortgage, installment loan, most department store, and credit card bills on time. Also, be careful not to exceed account limits and make sure none of your accounts are delinquent. Getting an account turned over to a collection agency is a credit score killer that you want to avoid at all costs. 

So next time you open up your mobile banking app, pay attention to the regular print at the bottom. And if your bank doesn't have this, well, then you can either do one or two things:

  • Change banks to one that does, or 
  • Write into corporate and make the suggestion asking them to include this information to their mobile banking app
Do you use your mobile app for more than just banking? Share your views below or email them to

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