American Express has launched a financial wellness tool to help users improve their credit score.
Score Goals, part of Amex’s MyCredit Guide, allows users to set their target credit score and then provides personalized recommendations to help them reach it.
The tool makes suggestions based on what others with a similar score range and credit profile (full file, thin file or previous bankruptcy) have done over the course of a given time frame. The tool is free and available to all U.S. consumers — even those who are not Amex cardholders.
“MyCredit Guide has helped consumers know where they stand financially, and now with Score Goals, they can also get a personalized playbook to help improve their credit scores and get one step closer to their financial goals,” Kunal Madhok, VP of U.S. consumer lending at American Express, tells CNBC Select.
How Score Goals works
If you’re looking for a resource to help you stay accountable while improving your credit, Score Goals can help. Here is a step-by-step guide on how it works:
Step 1: Users enroll in Score Goals by putting in their personal information (first/last name, email address, birthday, address, phone number, social security number) or signing in through their Amex account if they already carry a credit card like the American Express® Gold Card or Blue Cash Everyday® Card from American Express. Using your personal information, MyCredit Guide can pull a “soft” credit inquiry of your credit report (which does not affect your credit score like hard inquiries do).
Step 2: Once enrolled, users set their desired credit score (credit scores range from 300 to 850; the higher your score the better).
Step 3: Score Goals analyzes your credit history and key credit score factors, such as payment history, outstanding balances and credit utilization, to find areas of improvement.
Step 4: After reviewing your info, Score Goals generates personalized recommendations to help users achieve their credit score goal based on how real people with similar credit scores and profiles improved their scores, as well as by looking at data from credit bureau TransUnion tracked in real time. Recommendations can vary from opening up another credit account to paying down a specific dollar amount of debt, but they will fall into one or more of the following four categories: payment activity, percentage of credit used, debt/balances and new/recent credit. The recommendations will also come with a suggested time frame for reaching your target: six, 12, 18 or 24 months.
Step 5: To receive updates on their progress, users can login at any time to see their current credit score and how they are tracking.
Why your credit score matters
Your credit score helps financial institutions determine if you’ll qualify for all sorts of lending products, so it’s important to know your score, and if it’s low, set goals for improving it.
Some advantages to having a good credit score include lower insurance premiums, easier approval for mortgages and the best credit cards, lower interest rates, higher credit limits and loan amounts, plus more favorable terms overall.
Make sure you check your credit score often and make a habit of getting your free credit report through AnnualCreditReport.com so you can stay up to date on your financial health and have a clear understanding everything that makes up that magic 3-digit number.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the CNBC Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.