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Can someone explain Credit Karma in a nutshell?

Parachute07 1,171 October 20, 2012 at 10:35 PM in Finance (4)
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Hello,

In glancing at a thread about a CC, I noticed that a bunch of people listed their credit scores and what they got approved for. I made a lot of mistakes when I was young and dumb, so I know my credit isn't good - but seeing the scores made me wonder where I am. I paid for my score from one bureau from MyFico.com. . . but then I noticed everyone mentioning their scores from CK, which I realized meant Credit Karma. From what I can gather, the score they give isn't anything official, but I'm curious about how it might relate to the score I purchased. However, I don't really understand how they operate. How do they get my information for free? Does obtaining a score from them give my credit reporta hit?

The main good thing on my FICO score was that I haven't had any inquires in the past year. Since my score is pretty low, I don't want to do anything to drop it - hence my concern about credit karma.

Also, since I currently have no credit cards, the my Fico report suggested that I get one (and obviously be responsible with it) to boost my score. My girlfriend and I are contemplating buying a house in five or six months (more of a long term partnership than a fleeting relationship). She has absolutely excellent credit. I know my credit score isn't going to help, so I'm trying to think ahead and do what I can to improve it. I have no current need for credit - and our house timeline is very fluid - but like I said, I'm looking to do what I can. I figure that part of that is arming myself with information.

So how does Credit Karma work and does it make sense for me to check and compare?

Thanks for your wisdom.

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Joined Mar 2007
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#2
You will cause less ideal mortgage rates with less than A credit score. Try to get mortgage on her income only.

If you want to increase credit score, ask her to add you as authorize user of her bigger balance credit card. She doesn't need to give you the card but it will show on your credit report and boost your score. It will take care of your revolving credit gap and establish old pattern. You should draft a legal contract with her if you break up she can sue you for not only your own charges but hers if you abuse the arrangement,

You should use the free credit repor annually to see the last reported date of negative data on your credit report and what is your current balances. How long ago are we talking about negative info.
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#3
Quote from Parachute07 View Post :
So how does Credit Karma work and does it make sense for me to check and compare?

I'm going to try and answer all your questions...
  • First let me start by saying that if you're looking to buy a house, Do NOT apply for ANY credit cards right now. NONE. Those inquiries will get you.
  • There are 2 types of scores- FICO and FAKO. You can read more about there here. [doughroller.net]
  • The ONLY score that TRULY matters is FICO.
  • FAKO is a simulated score that is calculated using various algorithms.
  • Websites such as CreditKarma and CreditSesame offer ONLY FAKO scores.
  • You DO NOT get a hard inquiry for checking your credit score be it FAKO or FICO.
  • The ONLY place where you can get your TRUE FICO score is myFico.com but the service is not free.
  • CreditKarma offers a simulated FAKO score based on your Transunion credit report.
  • CreditSesame offers it based on Experian.
Now some further advice to increase your credit score.
RooseveltL is right in mentioning that the simplest way to do this for now is to ask your girlfriend to add you as an Authorized User (AU).


Some other tips.
Once you're done with the home financing, you can begin applying for credit cards.
  • If you've EVER had an AMEX credit card, I'd HIGHLY recommend getting a AMEX card, because they will backdate your account to when you first had the card. This will increase your Average Age of Account (AAoA) and that will increase your Credit score.
  • Depending on your needs and your credit score after the financing, you and your girlfriend may want to first get a simple credit card that has NO ANNUAL FEE. Hold on to this card then forever. It will boost your credit score as the years go by, by increasing your AAoA.
  • If you're looking to earn miles etc, you may think about getting other cards from Chase, but they usually look for excellent credit. Probably around 680 and higher. Though anything above 720 is best.
  • When you apply for multiple credit cards, you will get a credit line for each card. Having a higher credit line will increase your credit score by DECREASING your utilization rate.
  • Always try and pay off your cards in full.
  • And try to keep your utilization rate below 7%. So if you have 1 credit card with a $1000 credit line and your bill is $500, your utilization rate is 50%.
  • But if you have 5 credit cards each with a $2000 credit line, then your total credit line increases to $10,000 and if your bill is $500(total) then your utilization rate is only 5%. Get it?

Hope this helps. Do let me know if you have any other questions.
Cheers.
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#4
Credit Karma pulls your info from Transunion. It's a soft pull, meaning it won't negatively affect your credit. The score Credit Karma provides uses a different scoring model than myfico so the score can be off a bit, but it'll still give you a ballpark idea of how you're doing credit-wise. Plus they provide helpful tips and suggestions on how to improve your score, much like myfico does.

Credit Karma makes money by showing ads. For instance you might see, "You're credit score is ###. ABC credit card is a good match for you. Click here to apply now."

I've used their service for a couple years now and I've found it very helpful. To me it's one of those few services that you sign up for and makes you think, "Wow, it's amazing that this is for free." My opinion is you should sign up and try it out. Cool
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#5
Thanks for your interest in Credit Karma Parachute07. I actually work at Credit Karma and would love to tell you what we are all about. At Credit Karma we do offer free Credit Scores and Credit monitoring. We are an advertising based company but we target our ads. We only show offers that we feel are a good match for you as the consumer. Also we aren't just an estimate we are a true score which we get for you from TransUnion one of the 3 major credit reporting bureaus. Many people don't realize there are many different credit scores. Most people think FICO is only true score but, there are even 49 different FICO scores. It is impossible for consumers to access all the different ones or to know what one their lender will use. The best option is to have a few benchmarks. Please take a look at this recent article our CEO wrote for the Huffington Post http://www.huffingtonpost.com/ken...74599.html it can really help explain all the different credit scores.
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Quote from ckAmy View Post :
Thanks for your interest in Credit Karma Parachute07. I actually work at Credit Karma and would love to tell you what we are all about. At Credit Karma we do offer free Credit Scores and Credit monitoring. We are an advertising based company but we target our ads. We only show offers that we feel are a good match for you as the consumer. Also we aren't just an estimate we are a true score which we get for you from TransUnion one of the 3 major credit reporting bureaus. Many people don't realize there are many different credit scores. Most people think FICO is only true score but, there are even 49 different FICO scores. It is impossible for consumers to access all the different ones or to know what one their lender will use. The best option is to have a few benchmarks. Please take a look at this recent article our CEO wrote for the Huffington Post http://www.huffingtonpost.com/ken...74599.html it can really help explain all the different credit scores.
I have one question for you since you work for them. I signed up back in the beginning of it all and have loved the service since then. It really is fantastic. My only problem/issue is that I am an authorized user on several family members lines of credit. It seems like their activity affects my scores (both positively and negatively). Can you confirm this? Is this the way it should be?
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Quote from nizzy1115 View Post :
I have one question for you since you work for them. I signed up back in the beginning of it all and have loved the service since then. It really is fantastic. My only problem/issue is that I am an authorized user on several family members lines of credit. It seems like their activity affects my scores (both positively and negatively). Can you confirm this? Is this the way it should be?

Yes, being an authorized user on someone's account links you together so that their credit affects yours. Many people use this as a means to improve their credit rating, but it can also backfire if the person you are linked to becomes irresponsible with payments etc.
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Quote from Syrinx2112 View Post :
Yes, being an authorized user on someone's account links you together so that their credit affects yours. Many people use this as a means to improve their credit rating, but it can also backfire if the person you are linked to becomes irresponsible with payments etc.
That's not true at all. A straightforward explanation can be found here:

http://www.experian.com/ask-exper...eport.html
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Quote from huevos View Post :
That's not true at all. A straightforward explanation can be found here:

http://www.experian.com/ask-exper...eport.html

What I said was indeed true and is not in conflict with the article you posted.
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Quote from Syrinx2112 View Post :
What I said was indeed true and is not in conflict with the article you posted.
I reread your post, and I stand corrected. While your "credit" as in your credit history does not become linked, your credit does indeed show up on the authorized user's history.

It should be noted that authorized user history is often marginalized in credit scores, making much of this moot.
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Quote from nizzy1115 View Post :
I have one question for you since you work for them. I signed up back in the beginning of it all and have loved the service since then. It really is fantastic. My only problem/issue is that I am an authorized user on several family members lines of credit. It seems like their activity affects my scores (both positively and negatively). Can you confirm this? Is this the way it should be?
Are you an authorized user or a co-signer or co-applicant? If you are only an authorized user then you are not obligated to pay any of the debt but it could still show up on your credit report.
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Quote from ckAmy View Post :
Are you an authorized user or a co-signer or co-applicant? If you are only an authorized user then you are not obligated to pay any of the debt but it could still show up on your credit report.
Just an authorized user. But I thought it should not affect my credit score. Yet how credit karma works it looks like it factors in those account balances as my own when really they should not.
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Quote from nizzy1115 View Post :
Just an authorized user. But I thought it should not affect my credit score. Yet how credit karma works it looks like it factors in those account balances as my own when really they should not.
Yes it does show up on credit report and affects your score good or bad but you aren't legally accountable to pay it. The best thing if you can and don't use the accounts look into taking yourself off at least the ones affecting your score poorly.
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Quote from WinkyMcGee View Post :
Credit Karma pulls your info from Transunion. It's a soft pull, meaning it won't negatively affect your credit. The score Credit Karma provides uses a different scoring model than myfico so the score can be off a bit, but it'll still give you a ballpark idea of how you're doing credit-wise. Plus they provide helpful tips and suggestions on how to improve your score, much like myfico does.

Credit Karma makes money by showing ads. For instance you might see, "You're credit score is ###. ABC credit card is a good match for you. Click here to apply now."

I've used their service for a couple years now and I've found it very helpful. To me it's one of those few services that you sign up for and makes you think, "Wow, it's amazing that this is for free." My opinion is you should sign up and try it out. Cool
I just bought a car and the CreditKarma score was very accurate. My credit union scored me 10 points higher and the dealer scored me 3 points lower.
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#15
I was just denied credit at the bank based on late payments and derogatory remarks on my credit. CK doesn't reflect either of those. So I am questioning the accuracy.
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