Take control of your credit report with Credit Karma™

Take control of your credit report with Credit Karma™

When I was in college, I began working at a bank as a part time teller. Over the years I worked very hard and earned several promotions and advancements, eventually becoming a Bank Officer who handled many responsibilities, including approving loans. The training I went through really came in handy years later when I had my identity stolen and had to deal with a lot of stressful financial issues. While I was working as a loan officer, I took the opportunity to try and help my customers, going above and beyond what the job required. It can be challenging to let someone know they haven’t been approved for a loan they’ve applied for, and while it’s not always a surprise to the applicant, people usually know if they have credit problems unless it’s a stolen identity situation, showing kindness and offering tips on ways to improve or build credit can really go a long way. Once someone has been denied a loan, they are typically entitled to a free credit report. I encouraged my clients to bring that in when they received it, and we’d go over it together. Most people don’t fully understand how different factors affect their credit. I am pleased to be joining with Credit Karma™ in this sponsored post opportunity to explain a few of the basics about credit reports, and to let you know that you no longer have to be denied credit to access your credit report for free. Credit Karma™ offers this service every day! No credit card number required to access the information, and it’s updated weekly. Take control of your credit report with Credit Karma™ today!

Credit Karma™ opened in 2007 and since that time has slowly expanded the services they offer. With over 220 million Americans with a credit profile, they are trying to spread awareness about their FREE program. Sadly over 33% of Americans have never checked their credit report, and of those, approximately 25% have errors on their reports. Credit Karma™ has a mission to be pro-consumer, and to help put you back in control of your credit information. They are affiliated with Transunion, so the report you are shown is from one of the three credit bureaus.

The credit score range is from 300-820. A good score to aim for is about 720. However, 83% of Americans have a score below this number. Having a good score will help you get the best interest rates and best benefits, saving you money, and reducing financial related stress!

 I have some screenshots from Credit Karma™ that will demonstrate what a credit report looks like on their site. To make it readable, I had to break it into smaller pictures, I apologize for the overlap:

You can access the screen above by logging in to Credit Karma™, highlighting over the “My Finances” tab, and clicking on Full Credit Report (Beta).

• The Overview tab gives you your credit score, credit rating, a scale showing how it ranks on the scale (From Very Poor to Excellent), and your account mix. It will highlight any Credit Offers you may qualify for based on your credit score, and the terms associated with the offer. Then, it tells you your names reported on credit report (maiden names, etc), Addresses Reported (where have you lived), and Employment Information.
• The Account tab will list all accounts shown on your credit report, if they are open or closed, and what type of account it is (Credit Card, Mortgage, Auto Loan, Student Loan, etc). It shows the date opened, Status of the account (including any missed payments), and the current account balance (With the % of credit being used).
• The Credit Inquiries tab will let you know if anyone has requested your credit report recently, and what date that inquiry is expected to be removed from your report.
• The Collections tab lists any Agencies showing a collection account for you, the Original Creditor, Collection Open date (and term it has been in collection), and any Balance still owed on those collections.
• The Public Records tab lists any Public Records under your name (such as Bankruptcies, Civil Judgments, and Tax Liens), the type of Public Record, the Date Filed, The Status, and any amount still owed under the Public Record.

Important Goals to Aim For:

• Try to keep Credit Card Utilization between 20-30% of the amount of credit you have available.
• Payment History is a long term factor in your credit score. It can take a very long time for a late or missed payment to fall off of your credit report, so it is very important to make at least the minimum payment on time each and every month.
• Age of Credit History is important. Lenders don’t want to see all new and recently opened accounts. They want to see that you can pay on time, over time. Once you get a credit card balance paid down, it’s usually best to leave that line open so you can show that you are responsible handling credit over time  (the exception being if you can’t resist the temptation to max the card out). If a card is inactive for a period of time, the creditor may opt to close the account. If you plan to keep a card, to show credit history, it’s a good idea to use it at least 1-2 times per year, even if you pay it off right away, just so the account remains active.
• Total Accounts: Many lenders like to see a mixture of types of credit, and about 10 accounts. It may seem like a high number, but considering most families carry a mortgage, 1-2 auto loans, perhaps a student loan, and a handful of credit cards, and perhaps a line of credit, they do add up quickly.
• Credit Inquiries: There are “hard” inquiries by lenders, and “soft” inquiries by places such as Credit Karma™. When you are pulling your own credit report for free, that is typically a soft inquiry and doesn’t show on your report. Hard inquiries by lenders do show up, and can deduct points from your credit score. When you purchase a car or home, it’s normal to see 3-5 inquiries from various lenders, and won’t have a huge impact on your score. If you are in the mall requesting a credit card from several stores on the same day, that may raise some red flags to other lenders.

On the Credit Score Center Tab, you can see your Transunion Credit Score, Vantage Score, Auto Insurance score, and Home Insurance Score.

• The Vantage Score is a modeling collaboration by all three credit bureaus, with scores ranging from 501 to 990. It grades your creditworthiness on an A to F letter scale, so you can get an idea of how your credit looks across the three bureaus.
• The Auto Insurance Score ranges from 150 to 950. It is used primarily by auto insurance companies to determine the likelihood that you’ll file an insurance claim, and is not based on your driving record.
• The Home Insurance Score ranges from 150 to 950 and is used by home insurance companies to determine the likelihood that you’ll file and insurance claim. When I look back at my personal score over time, it was very good, until we had a flood in our OK home several years ago and had to file a claim. It plummeted, and is slowly going back up over time. (Don’t get me started on why we pay a premium each month so it’s there if we need it, but if we USE it for a legitimate claim they want to lower a score…)

So often on credit report articles, I see that readers comment that if others would just “pay cash” for everything and avoid credit, they could save a lot of money. While this is partially true, it’s just not reality for everyone. Many people need credit from time to time, especially for large purchases such as a home or an automobile to get to work. Yes, there are people who are able to work out a plan to pay cash for these things, but even for those people, having good credit affects them. Why? Places such as insurance companies, and even some employers, check credit reports before quoting rates or offering employment. Also, even with really good health insurance or a stable job, it can take just one severe health crisis or job loss to really change a family’s financial situation. There are many qualified, hard working people struggling to find work at the salary they’re accustomed to. I have seen people go through this who were used to living on cash not credit, and find themselves needing credit, but not qualify because they have no credit history. My best advice is to use credit wisely, and check your report often to ensure it is accurate!

I’d like to also make sure y’all know that Credit Karma™ offers free financial tools and calculators, in addition to forums where you can ask questions and get answers. 

Another great feature, is the Featured Cards by Credit Scores. You click on the tab (New to Credit, Poor Credit, Fair Credit, Good Credit, or Excellent Credit) that applies to your personal score. Under that tab, you’ll see some cards listed. It will tell you the name of the card, the terms, interest rates, Pros, Cons, Credit Score Approval Data (Average Credit Score that gets approved, and Typical lowest score Approved), and Real Customer Reviews! You can leave feedback if you’ve used that card program or read the reviews to help decide if that card is most appropriate for your situation before you apply. They can’t guarantee approval, but they can help guide you to the cards you’re most likely to be approved for based on the information they have.

Most asked questions:

1. What is best type of card for those new to credit or repairing bad credit? Secured cards can help build or rebuild credit when paid on time over time. Many will allow you to convert those to unsecured cards after you’ve paid as agreed over time and improved your credit score, or apply for a new unsecured card. There are some great articles on the Credit Karma™ site with tips for young people looking to establish credit.
2. When do collection accounts fall off of credit reports? It varies, and depends on your agreement with the creditor. It can be be when paid in full, settled, etc depending on the arrangement that you come to. The most important thing is to GET PAYMENT/SETTLEMENT AGREEMENTS IN WRITING BEFORE YOU PAY. They must honor their agreements, but the only recourse you have to force them to honor it is if you have a written agreement and have fulfilled the terms you agreed to.

Disclosure: This is a sponsored post written by me on behalf of the Credit Karma™.