Editorial Policy

How a simple text message can boost your credit score

Tina Orem

March 16, 2015

If you're like the two-thirds of Americans who use their phones to text, you send and receive an average of 41.5 messages each day, according to Pew Research. But there is one kind of unexpected text message that could save you a bundle of time and money — and even boost your FICO score.

That credit-preserving text message is the credit card alert. They come from your card issuer (with your permission, of course) and warn you that a certain activity has taken place on your account — for example, that your balance has gone over a certain amount, you've gone over your credit limit or your payment is due (or past due). The beauty of text alerts is to avoid certain fees, but even more important, they can boost and protect your FICO score by helping you make payments on time, keep your balance and interest rate under control and prevent card fraud.

“If you share the account with an authorized user — think college student here — it can also help you curtail spending before it spirals out of control,” says Thomas Nitzsche of ClearPoint Credit Counseling Solutions.

Wells Fargo, for example, offers six kinds of “rapid” alerts, in addition to its regular text alerts, such as payment due, payment posted, etc.:

  • If a transaction exceeds a certain amount
  • If a transaction is denied
  • If your card is used to make an online, mail or phone purchase
  • If your card is used outside the United States
  • If your card is used at a gas station
  • If your card is used to get a cash advance

Bank of America will text you when your bill is due, as well as when there's been a change of address on your account or a request for new checks.

Not all text alerts are created equal, however.

Text alerts that are actually worth it

“I think that certain card text alerts are worth it, others are just clutter,” notes David Bakke, who is a credit expert for the Money Crashers financial website. “To me, getting an alert when a payment is made on the account is unnecessary, especially since I'm the one making the payment.”

“Two of the most useful types of card alerts are due date reminders and when spending limits are exceeded,” he continues. “A few of the others that can be helpful are when your login information is changed or if a cash advance is made, both of which can be signs of criminal activity.”

“I think the most useful alerts are the immediate notifications when the card has been used,” says Nitzsche. “If you don't want an alert for that bagel you just bought, some banks will allow you to set the dollar amount range for which you would like to receive notification.”

“A payment deadline text is very important as well, because if you make a late payment or miss a payment, 35 percent of your credit score is based on payment history,” says attorney Steven Lesavich of the Lesavich High-Tech Law Group. “Most of us will be in a situation someday, because of a life event, such as a birth, death, illness, divorce, vacation, et cetera, in which we may forget that a credit card bill is due.”

The trouble with texting

Text alerts can help you demonstrate long-term behaviors that raise your FICO score, but they do pose some risks. A big one is that scammers often send fake text alerts asking victims to click on a link or take other actions that could compromise their accounts.

“Signing up for card alerts in and of itself won't make you vulnerable to scammers, but how you respond to alerts will,” Bakke explains. “For example, if you get a text alert claiming suspicious activity on your account [with a phone number to call], do not automatically call that number. Look it up on your card's website to be sure you're calling in to the right people.”

Nitzsche advises against responding to a text alert or clicking on a link. “If you receive a notification, log on to your account online as you normally would in order to verify what you are being advised via text. You can also call the company to verify, but be sure to call using the number provided on your card, billing statement or official website.”

And remember, don't let the text alerts get buried among the dozens of other texts you probably get in a day. “Card texts are worth it only if the user will read and [react] to the texts in a timely manner and not treat them as noise,” Lesavich says.