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What if applying for a new credit card were as simple as texting “CREDIT” to a credit card issuer? It’s practically that easy with Experian’s Text for Credit™ technology.

But before you get too text-happy with tech like this, make sure you know how it works and what you’re getting yourself into. Yes, taking on new credit accounts is a great way to rebuild bad credit (or maintain the good credit you already have). But the easier it is to apply for credit, the easier it is to complicate your finances and ultimately hurt your credit score. To use Text for Credit effectively and responsibility, here’s what you need to know.

About Text for Credit

On July 11, 2017, credit bureau Experian launched Text for Credit, an industry-first technology that allows you to quickly apply for credit through your smartphone.

“Technology has brought vast improvements to consumer banking, insurance and investing services, but the credit application process has remained largely unchanged,” says Experian President of Consumer Information Services Alex Lintner.

“With Text for Credit, consumers will get real-time access to credit, creating a better experience for the consumer and increased conversion for lenders and businesses.”

How it works

Experian compares Text for Credit to the “text to buy” technology that’s been around for years, both of which are part of the real-time economy. Investopedia defines real-time as “When a system relays information to a user at a speed that is near instantaneous or has a short delay from when the event actually occurred.”

You can read details of how Text for Credit works here and here, but this is the gist of it:

1) You see a credit offer – in a commercial, on a billboard, in a store – that includes a keyword or code

2) You text the keyword or code to the designated number

3) You receive a text directing you to an Experian-hosted page

4) You click on the link

5) Experian verifies your identity based on the info associated with your phone, as well as info on file with Experian

6) You are asked for the last four digits of your social security number

7) You follow the link to the page where you can view the lender’s offer and apply for credit, a process that should be a simplified one for most applicants as the retailer already has access to your information*

8) You review pre-qualified offers

9) You can apply for an offer and receive an immediate decision

10) If you apply and are approved, the credit is immediately available for you to use via either a barcode or account details

*Experian says “In most cases, you’ll be recognized by your device’s credentials, which lets you avoid filling out a lengthy credit application.” In other words, there is the possibility you’ll be asked for more, so don’t be surprised by it.

Where you’ll see Text for Credit offers

Experian doesn’t identify specific creditors that are using Text for Credit just yet, but does say we should expect to see its use:

  • In dealerships
  • In retail locations
  • In commercials
  • On billboards and other signage

Why Experian believes there is demand for this product

First, and perhaps most importantly, 97 percent of Americans ages 18 to 44 own smartphones.

Second, an Experian survey identified some concerns that may deter us from applying for credit as much as we might like – concerns that Text for Credit addresses.

When applying for credit, 58 percent of those surveyed said they were concerned about privacy issues. With Text for Credit, Experian says the credit application process – initiated and completed on your smartphone – is a secure and private one.

Beyond that, 42 percent of those surveyed said they were concerned by the length of the credit application process. Text for Credit is streamlined and pretty much instantaneous. This seems to be a particularly appealing benefit to creditors, as the Experian survey also revealed that:

  • 12 percent of those surveyed said they had walked away from a purchase because credit approval was taking too long
  • 16 percent of those surveyed said they had walked away from a purchase because credit approval was taking too long for the person in front of them

But Text for Credit seems expected to do more than simply prevent consumers from abandoning credit applications. The same survey seems to suggest it will encourage applications for credit that consumers wouldn’t pursue otherwise.

“Additionally, 21 percent of consumers said they would consider purchasing a car in the next six months if they could shop credit offers and apply via mobile device quickly and securely,” states an Experian press release. “Seventeen percent said the same about clothing, and 15 percent said they’d consider purchasing a large appliance.”

Pros and cons of Text for Credit


  • You can apply for credit on-the-spot
  • You can apply for credit quickly
  • You can apply for credit privately
  • You can get an answer immediately
  • If approved, you can start using your credit right away


  • You may be more tempted to apply for credit you don’t need
  • You may not take the time to shop around for better offers
  • You may make purchases you cannot afford

These pros and cons are pretty perfectly summed up by Experian itself: “Obtaining credit should never be done impulsively or recklessly, but it shouldn’t be needlessly complicated, either.”

Text for Credit? What You Need to KnowText for Credit tips

1) Limit how many credit accounts you apply for within a short period of time

Every time you apply for credit, it shows up as a hard inquiry on your credit report(s). On its own, a hard inquiry doesn’t affect your credit score by more than 5 points. But what will do damage to your credit are several hard inquiries over a short period of time. It makes you look credit hungry, which means you will be considered a greater credit risk. The more creditors start using Text for Credit technology, the more of these offers you’ll see and, in turn, the more disciplined you’ll need to be.

2) Pay attention to terms

The easier it is to apply for credit, the easier it is to skip over the fine print. Don’t do it. If it’s a credit card, look at interest rates and other fees. If it’s an installment loan, look at interest rates and the length of your loan to determine how much it is actually going to cost you in the long run.

3) Use your credit wisely

For convenience

Credit cards are a great way to have today what you cannot afford until tomorrow. Just make sure it is, in fact, tomorrow when you can pay it back. Not literally tomorrow, but at the very least, by the due date. In this way, you can treat your credit cards as the convenience they’re intended to be, not a crutch that can turn into costly debt.

Out of necessity

Ideally, you have savings in place to cover unexpected expenses, like medical bills and car repairs. Sometimes, though, it’s just not enough. Or, worse, you have nothing in savings at all. Under these circumstances, credit cards can be a lifesaver. Yes, paying off your credit cards every month is important, but what matters more is taking care of the basics.

It’s not just emergency situations that necessitate the use of credit. For instance, most of us don’t have enough saved to buy a car outright. Save as much as you can for a down payment, but finance the rest of this necessity. That said, think twice before buying a new car if you already have one that works just fine. And when you are ready to buy a car, consider used first.

For added security

Using a credit card gives you more protection against fraud than using a debit card. As reported by Magnify Money:

“The Fair Credit Billing Act limits your liability to $50 for any unauthorized use of your credit card. And if you report the card as lost before it is fraudulently used, you have no liability….

“In the case of a debit card, the Fair Credit Billing Act also limits your liability to $50, but only if you report the unauthorized use of the card within two business days. If reported between three and 60-business days, your liability is as high as $600. Beyond 60 business days, there is no limit to how much you are liable for.”

For credit-building

The only way to build good credit is to actually use credit – not just one credit account, but several, and a mix of them. If you don’t have more than one credit card, apply for another (provided you’ve had the first at least a year). If you don’t have an installment loan, consider a personal loan (for something you actually need) or a car loan (provided you don’t already have a car that’s in good shape). Then manage the loan using the tips explained in numbers four and five below. Learn more about credit mix.

For the rewards

Sometimes it pays to use a credit card – literally. The form of payment depends on the card. You could earn cash back (or credit) on certain categories of spending (e.g., gas, groceries, restaurants). Or you could earn points that you can redeem for other types of rewards (e.g., travel).

4) Return revolving account balances to zero every month

If you use Text for Credit to get a credit card, return the balance to zero every month. Contrary to what you may have heard, you need not carry a balance on a credit card for it to help your credit score. In fact, carrying a balance can hurt your score, as well as your bank account.

Carrying a credit card balance from month-to-month:

  • Increases your credit utilization ratio, which you should strive to keep as low as possible (no more than 10 to 30 percent)
  • Charges you costly interest fees

That said, it’s not necessary to pay off your credit card charges immediately. Simply wait until you get your bill and pay the balance in full by your due date. In doing so, you will lower your credit utilization ratio and avoid interest charges completely.

Of course, returning your balance to zero every month means never charging more than you can afford. If you don’t know you’ll have the cash on hand to cover it by the due date, don’t charge it.

Learn more about using credit cards – Breaking Down Credit Card Basics: What You Don’t Know May Surprise You.

5) Make installment account payments on time every month

If you use Text for Credit to get an installment loan, pay on time, every time. Because if the creditor reports just one late payment to the credit bureaus, it can knock as much as 100 points off your credit score.

The key to being successful with on time payments is making sure you can afford them before you commit to the loan. Go over your budget with a fine-tooth comb. If you have any doubt about coming up short, think twice about the loan or, at the very least, find categories of spending where you can cut back.

That said, you can do everything right in the budget department and still get into situations where you come up short. If and when this happens to you, contact the creditor immediately. This is not the time to ignore them (or the problem), but to face it head-on, keeping them in the loop, so you can work something out.

Learn more about using installment CPN loans to repair bad credit.

Want to accept a Text for Credit offer?

First ask yourself this:

1) Is it a good time for you to apply for more credit? If you’ve been applying a lot lately, the answer is probably no.

2) Do you need it? If it’s a car you’re considering, and you have one that drives just fine, again, the answer is probably no.

3) Can you afford it? “I’ll make it work,” isn’t a good enough answer. Consider your budget carefully to be sure you’re not getting in over your head.

4) Is it the best deal? See if you can find a better offer somewhere else first. Compare the terms of the Text for Credit offer to offers on credit comparison sites like Bankrate, Nerdwallet, and WalletHub.

If you get yes answers to all of these questions, go for it. If not, think twice.