Offtopic.com Q&A

With all the great discussion going on at forums.offtopic.com, I thought I would take a minute to consolidate some popular questions and answer them in a centralized location. The quick disclaimer is that these answer are based on my 10+ years in credit and finance but they are still my personal thoughts.

Q. I don’t understand why mine is 730 and not like 800 or something, I have one 30 day late payment… one… in December 2002. How long does that *** last for? And why does it make such a big impact?

A. Credit is composed of many elements. Payment history and length of credit are two key components. From your comment and score, it sounds like those two items are strong and not bringing down your score. The other key elements are your outstanding debt, inquiries, and type of credit. So perhaps you have high general debt or are maxed out on the credit that you do have.

Credit scores are comprised of almost 200 data attributes. It’s very difficult to pin-point one exact reason for a cause. We hope to start by show the top 14 reasons in the our next major release.

Q. How long has this been around? Has anyone actually received updates when your score changes?

A. Credit Karma launched in March 2008.

Technically, your score can change anytime your credit file changes. Some bureaus update their files once per week, others daily. We recommend that you check once per month since most lenders report once per month.

Q. Is 657 good for a single 23 year old with only 2 years of credit history (a credit card and a vehicle payment that just started in November?)

A. Good is relative. Since a large portion of credit is based on your payment history and length of credit, you are probably on the right track. We want Credit Karma to be a single source resource so you can monitor that score over time.

Q. I’ve never heard of this site, it is really reliable?

A. Good question. You should always be wary of sites that take your personal information. As someone mentioned we are BBB certified. In addition, we are also TRUSTe and VeriSign secured. Finally, our press page has mentions of us from sources like USA Today, The Wall Street Journal, and American Banker.

Q. What is the proper credit card usage to boost score?

A. Credit scores are comprised of dozens of attributes, so it’s difficult to give an exact number. A rule of thumb I suggest is 30% utilization or lower. For example, if you have $10,000 of available credit on your credit cards, try to keep your balance at $3,000 or lower.

On a side note, utilization is only counted on the amount the carry. If you pay your balance off in full each month, your utilization is zero.

Q. 758, But i don’t work, am still in graduate school, and have tons of student loan debt…wtf…how does work?

A. Your income is not a factor in credit scores which means a job does not drive the score. If you are in graduate school, I would think you have at least 4-6 years of credit history and that you probably haven’t defaulted or been late on other payments.

Q. 541. How bad is that? Any hope?

A. The score means your are on the lower end of the range. It will be tough to get credit and nearly impossible to get a mortgage unless you improve it.

There is always hope. Good scores take years to build but can be destroyed in days. The simple way is to pay bills on time and to apply and use credit responsibly. You can use Credit Karma to track your progress over time.

Q. By the way do you need to give them a working e-mail address? I dont need any more spam than I already get.

A. You do need a working email as part of our user verification system. With that said, we don’t send spam. If you don’t want any messages from us, we won’t send you anything!

Q. You might want to look into a credit repair service. Sometimes they can get **** legally taken off your report.

A. Be very wary of credit repair agencies. Many will just take your money. The ones that are legitimate are doing things that you, as a consumer, can do yourself.