Credit Karma was first launched and introduced to the consumers in the year 2007, the main attraction for customers which Credit Karma offers is two free credit scores and in addition to that free credit reports which is updated on a weekly basis.
Credit Karma also provides various credit tools which are used to educate their customers on the working of credit scores. These also include the concept which decides how certain credit decisions will affect their credit scores.
How To Get Free Credit Score From Credit Karma & Whether The Scores Provided Are Free?
As far as proving two scores are concerned they are free, and it is provided to their consumers without any cost. When you sign up for the Credit Karma, they will never ask your credit card information at any stage of the filling the form and also don't charge any of its consumers accounts no matter in what shape it is.
Accuracy Of The Scores provided By Credit Karma
Currently, Credit Karma provides their consumers with two types or versions of their VantageScore (version three), one score is based on the report formed by TransUnion credit report of their consumers, and another score which is provided is based upon Equifax credit report of their consumers.
In past Credit Karma also used to provide their consumers report based upon TransRisk credit score and several other industry-specific scores, but in currently they don't offer these scores, and one of the main reason for this is that nowadays the lenders don't use these scores to decide the creditworthiness.
Today VantageScore V3 is one of the free credit scores that lenders view to decide whether to approve the loan or cards. But the most important thing to know here is that VantageScore shares only 6% of the market, as compared to the FICO score which occupies about more than 90% of the market. The VantageScore offered by Credit Karma provides their consumers with is Version 3, which is having the range of 300-850, rather than 501-990 which was used by Version 1 and Version 2.
As a consumer, if you see your TransUnion VantageScore with TransUnion FICO score most of the times, you will find that there is a huge difference between the two scores, and most of the time you will observe that the score provided by the TransUnion VantageScore is much lower than TransUnion FICO score. And this will result in you to put into two scoring categories, and it will surely have the major impact which opting for the loan and in your business dealings. So, it is always advisable to check your FICO score before you apply for any important loans or cards.
You may also have experienced that when you compared your Equifax VantageScore, then there must be much more different when you compare it with your Equifax FICO score, and you will also find that your Equifax VantageScore is much lower than your TransUnion Vantage score.
And as you can see that there is the much more significant difference between your Credit Karma scores, so it is always advisable to use free credit monitoring websites as a guide. So that, you can keep an eye on your scores. Also, check whether your score is increasing or decreasing over time and can also take help of the various tools provided by these websites.
Free Credit Report From Credit Karma
In late 2014, Credit Karma announced to its consumers that they will now able to access the free full credit reports which are generated by TransUnion and now consumers of the Credit Karma can access their full credit report generated by Equifax as well. The consumers of Credit Karma should know that both of these reports are being updated weekly and they don't even have to pay any charges for it.
Consumers can access their free full credit reports every twelve months, and for this, they can use the website - annual credit report. It is also to be noted that consumers can get their full credit report from Credit Karma as a part of their product offering as well.
Fair Credit Report Act (FCRA) & Its Relation With Your Credit?
It is the government Fair Credit Report Act or FCRA which is in charge of empowering the exactness, decency while producing the report and protection to every one of the information which is gathered for creating the report, which is held by all the three noteworthy departments in the United States.
A portion of the real rights which goes under FCRA is that you will be educated when the data in the record is utilized against you, what are information in the document, the demand of your FICO rating, can debate about wrong or unseemly information. Notwithstanding that if there is off base or wrong information, the revealing organization must need to adjust or erase the information.
Credit Tools Provided By Credit Karma
Credit Karma has some credit tools which are available to all its consumers. Below you can get the information about what are these tools and for what these tools are used for:
- Credit Score Simulator: This score simulator let the consumer analyze how their credit decisions like opening or closing of the account affect their credit score. The service providers claim that this tool is just for the educational purposes of the consumers, but it is found and observed that this is very accurate and fair way to analyze how the credit decisions made by the consumers affect their Credit Karma credit scores.
- Credit Monitoring: This is another tool which helps the consumer to with the notifications when any major changes have been made to their credit reports, in this case, it is the TransUnion credit report. This can be very useful and beneficial for the consumers so that they can monitor any suspicious activities in their account like credit fraud or online theft.
- Account Monitoring: This is very new and recent feature which Credit Karma have added in their tool list for the benefit of their consumers. Account Monitoring tool allows their consumers to add their online financial accounts, for example - banks, credit cards, etc. This tool helps the consumer with the notifications whenever there is a bill due or any suspicious activity occurs.
- Credit Report Card: Credit report card is a report card which summarizes the key components which are used to calculate the credit score of the consumers. After calculating all the factors which are affecting the credit score, it gives the grade from A to F, along with the overall grade.
- Credit Advice Forums: Credit Karma is also having a credit advice section for their consumers who can ask questions and can also answer the questions to each other (Existing members). It is not a platform to get the 100% correct and accurate information but many doubts can be cleared, and members can have a healthy and meaningful conversation with each other.
Credit Karma Calculators
Home Affordability Calculator: In this type of calculation for the affordability for the home usually - monthly income before taxes, down payment, monthly debt payments and mortgage interest rates have been entered into the calculations. But while doing so consumers should keep in mind that it does not take account of your credit score or credit history, so basically, it is a pretty vanilla calculator.
Debt Repayment Calculator: For the debt repayment calculation - balance owed, interest rate and one of the desired payoff timeframe or expected monthly payment is being entered. And this calculator will tell you either the monthly payment (in case desired payoff timeframe is being chosen) or expected payoff time (if expected monthly payment is being chosen). But as a consumer, you should keep in mind that again it is a vanilla calculator, and it won't account your credit score or credit history or offer any alternatives. For example, you are eligible for the credit card that has an introductory APR of 0%.
Simple Loan Calculator: This is the calculator offered by Credit Karma which is used to calculate the loan repayment installment amount, match up the loan duration and calculation of repayment durations, etc. In addition to entering the loan amount, interest rates and the number of years and you can adjust all these things. This is another example of the vanilla calculator as it won't take account of your credit score and credit history.
Amortization Calculator: In this calculator, you need to enter the loan amount, interest rates and the number of years and this calculator will show you the number of payments which you need to make the loan repayments, what will be a number of those payments and the total amount of calculating the number of payments. This calculator also offers their consumers with a chart of principal, interest, and balance.
How Credit Report Information Is Being Occupied
Beneath you will see the data conveyed in your charge card report, this data is exceptionally valuable when loan specialists break down your report and can see whether they can loan you the cash or not according to your dependability:
Payment History (30%) - You installment history is essentially the data to see whether you use to pay your bills inconvenient mold or do the late installments. What number of the reprobate record you are aggregate having and what number of advances you have effectively forked over the required funds is likewise found in your installment history. You installment history was additionally having the greatest effect on your FICO score, and the main thing which any loan specialist might want to see is that have you paid your credits to account on time or not.
Credit Use (30%) - The measure of credit you owe additionally influences your FICO assessment highly, on the off chance that your credit to obligation proportion is low then you will be profited with great FICO rating. This proportion is the amount you precisely owe than your credit, and it will help to loan specialists to realize that you don't depend on excessively using a credit card. You can make sense of your credit use rate yourself additionally by simply separating your aggregate credit adjusts by your aggregate credit limits.
Credit Age (15%) - If you are having exceptionally old or longer record of loan repayment it implies that you are extremely old and experienced borrower and it can be worth to loan cash to you. In the case that you have spent such a large number of years in paying your home advance or car advance, it makes a great impression of you on your FICO assessment. You can begin constructing your record whenever and it's never past the point where it is possible to begin it, so banks can comprehend that you are reliable and cash can be a loan to you, and it's in safe hands with no dangers.
Account Mix (10%) - some of the time it is a decent technique to stir up the things every so often, and you can go for an assortment of rotating and portion credit like charge cards, an advance or an open record like service bills. Intense it will have a little impact in your FICO assessment and a decent credit blend implies you can juggle in the middle of the records and keep them noticeable all around if talking monetarily.
Credit Inquiries (10%) - If you have the excessive number of credit request it will unquestionably going to influence your score adversely, as though you apply for the excessive number of charge cards immediately then a few credit request will be seen on your report. Also, when you apply for the few acknowledge checks and apply for the opening an excessive number of records it will give a feeling that you are at credit hazard. It is constantly prudent to apply for new attributes sparingly to restrain the measure of credit watches that you will bring about.
In the time of November 2003, FACTA ( Fair and Accurate Credit Transactions Act) was passed by the US government and marked into an elected law. There are different things this law permitted to its purchasers yet next to that it likewise enable you to get the entrance to free individual credit report from each of the across the country buyer detailing organizations, which are additionally known as credit authorities once in like clockwork.
There has been some trouble in acquiring these credit reports so beneath you will see the different rules to get your free credit reports from the credit agencies and can get simple access to your reports. Under FACTA any individual can get their free credit report from any of the three ways - through the post, using the telephone or using on the web. We will talk about each of the technique to get your credit report in underneath segments.
Credit Karma Vs. Credit Sesame Vs. Quizzle
The three major players who are active in providing free credit report credit monitoring space currently are - Credit Karma, Quizzle, and Credit Sesame. In the section below we will compare all the three of them so that you can decide which is best monitoring website and which is the worst monitoring website among the three. For every category the points are given to them so that you can easily understand by just have a look at them as given in below sections:
Credit Bureau Used By Three Credit Monitoring Websites:
- Quizzle uses Equifax as credit bureau to generate the reports.
- Credit Karma uses TransUnion to provide a credit report to its consumers.
- Credit Sesame uses Experian to provide a credit report to its consumers.
The ranking is above given by considering which credit bureau is most often used by credit card issuers. Mortgage lenders will look at all the three credit reports as well as credit scores while deciding whether to give a loan to a particular application or not and there is not any information for auto loans as to which they use credit bureau.
Credit Score Used By Three Credit Monitoring Websites:
- Credit Karma offers multiple scores to its consumers who are from - VantageScore V3 and other industry-specific scores.
- Quizzle offers VantageScore V3.
- Credit Sesame offers the Experian National Equivalency Score.
As you can see the ranking given above Credit Sesame is given the last ranking as score offers from ENES is not used by the lenders while considering the applicants for the loan. Credit Karma is at the top rank as it used to provide the three scores to its consumers from - TransUnion Auto Insurance Risk Score, TransRisk Score & TransUnion Home Insurance Risk Score additional scores and also with VantageScore. Quizzle is at the second spot in the rankings given above.
Credit Report Provided By Three Credit Monitoring Websites:
- Quizzle used to provide two credit report every twelve months to its consumers.
- Credit Karma and Credit Sesame provide a partial report to their consumers once every twelve months to their consumers.
Credit Tools Offered By Three Credit Monitoring Websites:
- Credit Karma
- Credit Sesame
As per the rankings are given above Credit Karma is at the topmost position as it is having the best suite of credit tools which it offers to its consumers amongst the other two credit bureaus. Credit Sesame was ranked last among the three as it uses most of the 'tools' very conveniently to upsell full credit reports and new credit to their consumers.
Final Rankings Of Three Credit Monitoring Websites:
|Credit Karma||Credit Sesame||Quizzle||Winner|
|Credit Score||VantageScore + Industry specific Scores||ENES||VantageScore V3||Credit Karma|
|Credit Tools||Wide Range of Tools||Mostly Used To Monetize||Good selection of Tools||Credit Karma|
- Credit Karma and Quizzle share the top position.
- Credit Sesame is below amongst the other two because of many lacking in it.
As you can see above as per the rankings are given Credit Karma, and Quizzle share the top position as Quizzle also decided to change from Experian to Equifax put them on equal footing with the Goliath that is Credit Karma. But in all the rankings given above Credit Sesame is most of the times at the last position and lagging way far when comparing with the other two credit bureaus. Credit Sesame need to make many improvements in the credit score they offer and tools to be less monetization in your face and more helpful.
As a consumer, you should understand that all the three websites free credit score to their consumers and there is not any harm to try all the three and understand the features and tools offered by all the three credit bureaus. You just need to sign up for them and check out yourself which is beneficial to you.
Final Words For Credit Karma
Credit Karma is a gateway for their consumers to get access to their VantageScores and free full credit reports which are generated from Equifax and the TransUnion. Credit Karma is continuously upgrading themselves by the offering of various products, their website and more and more features which are helpful for their consumers.
The credit monitoring feature offered by Credit Karma is very useful for their consumers as consumers can easily keep an eye on their two credit reports at the same time and can also analyze which credit card bureau is doing a hard pull from.
If you still think whether to sign up for Credit Karma or not the ideal scenario would be to check it out as it is free and get introduced with their features and products. As Credit Karma offers their consumer free credit reports and also provide the various tools so it would always be advisable to check it out and in case if you are not satisfied and happy with you can anytime cancel your account with Credit Karma.