March 16th, 2010
Dear Credit Karma… More About Credit Karma!
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Dear Credit Karma,
Is Credit Karma really a free service?
Absolutely.Credit Karma is free and is available at absolutely no cost to you. Credit Karma has no catch, gimmick, or secret subscription, and will never charge you now or later down the road. Become a Credit Karma member for free, and you can use the site as often as you want, play around with our financial tools, and pull your credit score daily without ever having to worry about getting hit with a subscription fee or any type of charge. We do promote money-saving offers featured by our advertisers that are specifically tailored to your credit profile, but you are never required to click on an ad or participate in an offer.
What’s in it for us? We’re supported by advertisers. The ads on our site enable us to make this service free for you, the consumer. Rest assured Credit Karma is truly a pro-consumer site interested in helping you manage healthy finances and healthy credit at NO COST to you.
Dear Credit Karma,
How often do scores change?
Credit scores can change at any time, depending on when your credit report is updated and what new information is added to your report. Any derogatory or positive action that deals with your credit lines such as an auto loan, credit card, mortgage, business loans, joint accounts, etc has the potential to change your credit score at any time.
Since every person’s credit report is unique, it’s difficult to tell when exactly a credit score will change; a late payment on a credit report may immediately ding your credit score, while it may take months of on-time payments to reflect positively in your credit score. The frequency of updates to your credit report, which is what your credit score is comprised of, varies between the credit bureau and the lender. In most cases, you can expect your creditors and lenders to report new balances, payment activity, credit limit changes, or late payment information to the credit bureaus every 30 days. For that reason, it is a good idea to check your credit score for accuracy at least once a month.
Dear Credit Karma,
What exactly is the Credit Report Card?
The Credit Report Card is a snapshot of your credit report that helps you better understand the key components impacting your credit score.
While a credit report shows all the details of your credit history, it’s often unclear to consumers how their credit history and behavior results in the credit score they have or how to improve their credit health. So Credit Karma developed the Credit Report Card to help consumers easily understand their credit score and identify areas they need to improve on by providing comparative metrics against other Credit Karma members.
The Credit Report Card has seven metrics based on components of your credit report, and gives you a grade from A-F with details to show you how your grade is determined and how it measures up to other members. For example, you might get an A on your overall credit utilization metric because, as the Credit Report shows you, you keep your credit utilization under 30% (recommended ratio of credit use to total credit).
It is important to understand that the letter grades are determined by average score of users within each range. This does not mean that all users with a D or F in one particular metric will have a low credit score, but that *on average* users within that range have a lower credit score.
Keep in mind that the credit grade that Credit Karma has determined will help you evaluate your credit health, but won’t actually affect your score. It’s a great, easy-to-understand way to look at your credit behavior and tackle your credit issues to polish up your credit score.
Submit a question now, and maybe Credit Karma will answer your question on our next Q & A blog post!