What The Heck is Credit Karma Anyway?
Are you interested in buying your first home but don't have the best credit in the world? If you have been paying attention, you've probably seen an ad or two on television about Credit Karma. Seeing an advertisement sometimes doesn't tell the whole picture, though, of what exactly a company does.
Credit Karma is known as a credit improvement and decision company. Lots of folks wonder what Credit Karma does. In short, they give you the tools and information to work on making your financial picture a brighter one. Maybe you have long term aspirations of owning a home or a fancy car? If your credit lacks making these kinds of purchases, Credit Karma can help you get on the right track.
While you can see many free credit check companies online, many of them turn out to be not so free! The majority of the time, these "free" offers will ask you for your credit card information, though they won't charge you immediately.
They offer trial periods to look at your free credit score, but if you forget to cancel, you'll end up being charged. These kinds of companies are counting on a certain number of people to make this mistake.
Credit Karma is not like that at all. Credit Karma offers a free credit report without the need to enter your credit card information. Those who have a desire to become a proud homeowner at some point can use the site to improve upon their credit. Maximum Real Estate Exposure has a detailed analysis of exactly how Credit Karma works that is worth checking out.
How does Credit Karma do this and make money? Let's take a look and find out.
Free Credit Scoring Check-Up
When using Credit Karma, you are no asked to enter credit card information or subscribe to monthly services. Credit Karma makes their money mostly by selling targeted advertising, which means that you don't have to pay to see your free credit report. Getting access to this information is easy.
You will be provided your credit report and score for free. The details provided are updated every week. However, it is worth noting that Credit Karma does not use the same credit scoring model as mortgage lenders do. This is not the end of the world but should be taken into consideration.
Lenders typically use what's known as a FICO score. Credit Karma uses two of the major credit reporting agencies to supply their credit information - these are Equifax and Transunion. A member has access to monitor their credit daily, all for free.
Credit Score Simulation
When thinking about making homeownership a reality, one of the most vital things to consider is your credit score and how you can improve it. Homebuyers who have the best credit scores put themselves in a much better position to get the best terms and interest rates. Getting in the higher credit scoring ranges should be a goal of anyone who wants to be a homeowner.
By working with Credit Karma, you will be able to see how your decisions will impact where you stand credit-wise. For example, when you apply for credit, it can impact your score. But really, by how much? It would be great to know, right? This is where Credit Karma can help!
The credit score simulator provides you with what will happen to your score when you apply for credit or make other financial decisions. If you are getting ready to apply for a home loan, you can use their simulator to see what you can do to increase your score, thereby increasing the chances of being approved.
You'll be able to see what will happen to your score when an inquiry is made on your file, when you pay off your credit balance, and when changes are made to your public records, among other things. The modeling will also let you compare your score to other people in a similar situation to you. Having this kind of information can be essential to those who want to make their dream of homeownership a reality.
Credit Report Card
Credit Karma provides a Credit Report Card. It gives you an A to F grade in the following areas:
- Age of your accounts
- On-time payments
- The number of accounts
- Your credit utilization
- Hard inquiries on your credit report
- Negative blemishes
- Your overall credit picture
This is Credit Karma's simple way of showing you where there are issues and where you can improve your credit score. Using this information, you can put together a plan that will put you in a stronger place financially. By doing so, owning a home could come sooner than you think.
Other Credit Karma Features
Other services provided with Credit Karma include information about your debit accounts. It will show you how much your balances have moved up or down since the last time it was updated.
In addition, Credit Karma will recommend products to you as well. Using your prior credit history, they will show you cards that you'll most likely be approved for. They use data based on the approvals of other users of the service to decide if you should be approved as well.
What About Other Companies Similar to Credit Karma?
Is there a competition that is similar to Credit Karma? The answer is yes. The company most similar to Credit Karma is Credit Sesame. If you wonder what Credit Karma and Credit Sesame's differences are, you can see an excellent summary in the article found at RISMedia. While there are some strong similarities between the companies, the most glaring difference is that Credit Karma is a free service, and Credit Sesame is paid.
Both of them are reputable companies that have been around for a while. Credit Karma was founded in 2007 and Credit Sesame in 2010.
Final Thoughts on Using Credit Karma
As a real estate agent who has been selling real estate for thirty-four years, I can say that anyone with any desire to build their credit to buy a home should check Credit Karma out. They are a reputable company that has been around for a long time.
The service provides you the knowledge to better understand your credit and the things you can do to improve it. When you're looking to get a new loan or fix financial problems holding you back, the information will be vital. As mentioned, the service can be beneficial for those who want to make homeownership a reality.
Once you've accomplished your credit improvement goals, you'll be ready to move on to picking the best lender. If you have been put off by free credit checks when asked for your payment information before, maybe it's time to give it another look with a service that is actually free. Credit Karma has a lot to offer, without being a trial that you need to remember to cancel at the end of the month.
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