Credit Karma Review

Credit Karma is an online service that allows you to monitor your credit score.

Your credit score has a huge financial impact on your life. It affects the interest rates you pay on loans, if you have to pay a deposit on utilities, and even your home and auto insurance rates. You’ve probably seen many advertisements to get your credit score for free—of course the catch is that you must provide a credit card number and sign up for a monthly service.

No strings attached

Credit Karma is a free, yes I said free, website for tracking your credit score. Signing up does not require a credit card and the service is paid for entirely by advertising! Credit Karma also does not sell your information to potential advertisers. Instead they display personalized offers, Karma Offers, to you on screen and let you choose to pursue them or not.

What’s included

Credit Karma offers three scores:

·  TransUnion credit score

·  Vantage Score

·  Auto Insurance Score

In addition, Credit Karma offers several tools. Here are couple of the most useful:

Credit Report Card—this tool offers a detailed breakdown of the components affecting your credit score and your grade in each area. This includes Credit Card Utilization, Payment History, Age of Credit History, Total Accounts, Credit Inquiries and Derogatory Marks. For each, Credit Karma explains the factor and rates how much it impacts your credit score—low, medium or high. You then area able to see your ranking using grades A through F and how your score compares to the score of others.

For example, Credit Card Utilization is the percentage of your credit card limit that you are using. According to Credit Karma this factor has a HIGH impact on your credit score. It also tells us that to get an A rating in this factor you should be using between 1 and 20% of your credit limit. If you are using over 61% you are rating either a D or F. This is a great tool to help you understand what you need to do to raise your credit score.

Credit Score Simulator—this tool allows you to assess how certain financial decisions will affect your credit score. For example, you can simulate how adding a new credit card or loan, closing your oldest account, or making a late payment will affect your score. This can be useful in choosing what financial actions you should take.

Advantages

·  Credit Karma stands out against the competition because it is completely free. There is no trial period and you don’t have to worry about canceling your account before you are charged for the service.

·  Credit Karma is an active community with user reviews on lenders, insurance and banks. You can search, for example, for banks with cd high interest rate offers.

·  Credit Karma offers a number of useful tools as well as calculators and informative articles about topics like choosing the right credit card.

Disadvantages

·  Credit Karma does display an aggressive amount of advertising. This advertising is personalized. For example you might see an ad that says,

Overpayment Notice: You could overpay on interest by as much as $1,916 over the next 3 years. We recommend transferring balances to the Capital One Platinum Credit Card.

These may or may not be good deals for you—remember adding new credit cards or inquiries can adversely affect your credit score.

·  To sign up for Credit Karma you do need to provide your social security number.

·  Credit Karma does not give you your FICO score which is what most lenders use. However, it should be close enough to gauge your credit worthiness.

Overall, Credit Karma is a great tool for monitoring your credit score–and it’s free!