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Money matters: Credit Karma

Things have happened in the last few years that have prompted me to make life changes. No details right now. It’s not the business of the whole, wide world. Just say there’s room for ghosts, agitators, and moles, and more in freedom.

One change, though, is that after years of having a house but no money, I sold Cabin Sweet Cabin last summer and moved into a friend’s trailer. So now there’s a little money but no house. That’s how I was able to go to Panama.

Anyhow, after a long sometimes-painful, often blissful, non-relationship with money, its on my consciousness again. (It’s always been on my consciousness in the sense of believing that unproductive debt is unproductive for freedom seekers.)

Bored last weekend, I poked around websites having to do with credit, budgeting, etc. And I found this cool one. Credit Karma. Maybe you knew about it; I didn’t. But in any case, here’s how it works.

You already know that you can get free annual copies of all three of your credit reports from the Big Boy agencies, Experian, Equifax, and TransUnion. Only about 1/3 of credit-using Americans do. And even if more did … well, once a year isn’t enough. Credit can get screwed up in an instant and can take months of constant monitoring to unscrew.

Also, those reports don’t give you your credit score. The score is not only a big deal to lenders; it’s a tool that can give you a shorthand guide to improving your own credit management. Do the “right” things and up it goes — though often slowly. Mess up and it plummets. You can also make strategic decisions that might push your score down temporarily but boost your status in the eyes of lenders, employers, and such in the long run. But scoring is complex and quirky; what pushes one person’s credit upward might drive another’s down.

The score can change day-to-day. Usually, if you want to monitor it, you have to buy access via some subscription plan that’ll cost you $100 or more a year.

Credit Karma is a free site that works with TransUnion to let you access an updated score as often as you like and track it through the months. At no cost. Not only that, but with its “Credit Report Card” feature, you get enough info to deduce what’s in your TransUnion credit report, even though you don’t see the actual report. Again, you can update that as often as you like. For free.

Okay, out with the negatives: You have to input serious personal data to use Credit Karma. Also, the credit score you get isn’t the “official” and all-holy FICO score; it’s TransUnion’s own TransRisk score. (Companies wanting to use the genuine FICO score must buy the rights from Fair Isaac, the score’s originator. So what they do instead is create their own scoring systems based on similar algorithms. All three credit bureaus have their own algorithms and data. Or they buy the FICO system but market the resulting score under their own brand name. Their numbers will deviate a bit from from each other.) So keep in mind that the other two big bureaus could have different info on you and yield different results.

And here’s something that may be negative or positive, depending on your mindset: Credit Karma will then offer you credit cards, insurance, and other products based on your score. Lousy credit? You’ll see offers for secured cards. Great credit? You’ll see offers for the best products in the business. These offers aren’t intrusive. They aren’t pushed at you against your will. You have to click if you want to look at them. (Be sure to uncheck the box that wants to email “savings” at you.) But they’re part of the reason Credit Karma can operate for free.

This site certainly isn’t for the “ghosts” of the world. Or for people who are completely debt free and plan to stay that way (which, come to think of it, makes you largely a financial ghost even if that was never your intention). But for anybody who possesses so much as one credit card or one car loan, frequent free monitoring of your profile could be useful.

Yes, the idea that your entire financial self should be summed up in a single number is stupid. Insulting, even. And not always so useful, as many mortgage lenders have discovered to their chagrin. But Credit Karma could help you deal with the stupid, unuseful reality. Think of it as a game that you can play and win.

6 Comments

  1. Larry
    Larry March 31, 2010 10:28 am

    My credit union will tell me my credit score as often as I want it, for free. Might be something to look into if you belong to one.

  2. Claire
    Claire March 31, 2010 1:59 pm

    Good tip, Larry. While it would be handier to monitor the score online, your option does keep people from having to enter the dreaded Personal Data.

  3. Jack Veggie
    Jack Veggie March 31, 2010 7:48 pm

    Slaves to debt debating which is the better master to be owned by, are still slaves to debt.

  4. Jake MacGregor
    Jake MacGregor April 1, 2010 6:13 am

    Claire

    I believe credit is one of the tools big banks use to enslave us and mold our behavior. We used to all bank with Jimmy Stewart when he knew us and did business with us on a handshake. Now Mr. Potter has Fair Issacs and owns us lock, stock and barrel.

    I have had brilliant scoring and in a flash my score dropped two hundred points … though I was current, made amazing amounts of money, etc. Why? Because my lifestyle did not fit inside the ‘box’: ie, I had tried to refinance our 27 acre farm when rates were absurdly low and bendingtree had tried finding other lenders 67 times … without my knowledge the credit scoring software decided i had too many inquiries and dropped me like a stone. The reason lenders found us unattractive was because we lived on more than 10 acres and more than 1 house on the property (in-law cabin) (to me that sounded like a nice place!) Capricious!

    To that end I no longer give a rip about my credit score as it only signifies the extent which I am owned by others. I will never use credit again.

    best regards

    Jake

  5. Claire
    Claire April 1, 2010 6:53 am

    Jake — couldn’t agree more that scores are arbitrary and results capricious! (Although in the last few years FICO has supposedly fixed the glitch that brought your score so low. Now, with mortgages or vehicle loans, all inquiries within 45 days are considered to be one inquiry for purposes of scoring to take rate shopping into account.)

    Like you and Jack Veggie, I’ve been saying for years that debt (particularly “unproductive” buy now, pay later “consumer” debt) is nothing more than selling one’s own future. Kudos to you for your blessed independence! (And for your Jimmy Stewart/Mr. Potter analogy.)

    That blog entry was mostly directed to people who are, for whatever reason, still playing the credit game. Maybe they’re playing it for strategic reasons. Maybe because they’re stuck in debt and trying to work their way out. Maybe they’re young and just trying to establish a reputation as reliable people. Maybe a mortgage is the only way they can get their place in the country. Who knows?

    Yeah, too many have sold their souls and futures to debt; but some debt, for some reasons can be useful. If it’s carefully thought out. Different strokes …

  6. veterinary technician
    veterinary technician April 12, 2010 3:18 pm

    found your site on del.icio.us today and really liked it.. i bookmarked it and will be back to check it out some more later

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