If you’ve signed up to myfreedom using Open Banking recently, you’ll have been given a Fusion Score. But you might be wondering, how does it differ from a traditional credit score? To help you unravel their individual benefits, here’s our quick guide to the Fusion Score vs a credit score.
Understanding your credit score
Your credit score is what lenders have traditionally used to assess whether you can borrow money. It’s calculated solely on how you’ve borrowed money in the past. So, if you’re new to the UK credit market or your finances took a hit a few years ago, it’s likely that your credit score isn’t going to be as strong as it could be. Because of this, when you check your eligibility for a loan, credit card or mortgage, you might not get the results or rates you were hoping for.
Getting to know your Fusion Score
Your Fusion Score is combination of your traditional credit score and your bank transaction data. This means that unlike a credit score, your Fusion Score will take into account the fact that you have a regular income, pay rent each month and save money. By sharing this information with lenders, you can prove to them that you can afford to borrow money. This could secure you an offer that would be otherwise out of reach, or a better rate – reducing your monthly repayments.
Fusion Score vs credit score
Both the scores have their benefits. Here’s why it’s a good idea to look after and keep tabs on each one.
Benefits of a credit score
- Universally used by lenders
- Positively impacted by a healthy credit history
Cons of a credit score
- Doesn’t provide lenders with a complete picture of your finances
- Unfairly blocks some people from the credit market who can afford to borrow money
Benefits of your Fusion Score
- Provides lenders with a more complete view of your finances
- Can help those shut out of the credit market access credit
- Can get you a better rate – no matter how strong your credit score
- Provides you with personalised insights into how to improve your access to credit
Cons of your Fusion Score
- Not currently used universally
The aim of the Fusion Score is to give more people a fairer way to access credit. If you want to find out your Fusion Score and get insights into how lenders really view you, you can sign up to myfreedom for free here. There’s no catch, no cost (creating a Fusion Score is free), and signing up won’t damage your traditional credit score.
Please note: When you create your myfreedom account, you’ll be asked to connect to your bank account via Open Banking. This is a safe, secure and FCA regulated way for us to get the bank transaction data we need to create your Fusion Score.
When you connect us to your account, this will give us one-time, read-only access and we won’t be able to move or affect your money in any way. When choosing your account, please select the one your main income is paid into to ensure you receive the best possible Fusion Score. If you cannot find your bank when setting up your Fusion Store, it is likely that your bank has not enabled Open Banking yet. If you have another account that you use for regular transactions such as rent or bill payments, please add that too before finishing up.