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Will Using Credit Karma Hurt Your Credit Score?

November 20, 2014 By Jeffrey Strain 6 Comments

Will using free credit score sites like Credit Karma hurt your score?

One of the questions people often have when using free credit score sites like Credit Karma, Credit Sesame and Quizzle is whether using them will ultimately hurt their credit scores. This question usually arises because they hear somewhere that checking your credit score too many times can lower your credit score. While this is true, it fails to take into account the difference between a “hard inquiry” and a “soft inquiry” when your credit score is checked. When you get free credit scores from Credit Karma and other sites like it, you are doing a soft inquiry, not a hard inquiry. Understanding the difference between these two types of credit score inquiries is essential so that you don’t accidentally damage your credit score.

What Is a Hard Credit Score Inquiry?

A hard credit score inquiry is usually done when you are directly applying for some type of credit and the institutions where you are applying checks your credit report to see if you qualify for a loan. Typical instances when a hard inquiry would take place is when you apply for a credit card, a car loan, a student loan or a mortgage. In most cases, you will directly authorize the lending institution to pull your credit report because you are hoping to get the credit or loan.

The important aspect of the hard credit score inquiry is that these do lower your credit score. While a single hard inquiry will only lower your score by a few points, a number of hard inquiries over a short period of time can have a much more profoundly negative affect on your score. Hard inquires usually stay on your credit report for two years, although the negative affect of them may wear off before they completely disappear from the report.

What Is a Soft Credit Score Inquiry?

A soft credit score inquiry is when a credit report is requested, but not for the purpose of giving you credit or a loan. For example, if you want to rent an apartment, the apartment company may do a soft inquiry just to make sure you haven’t defaulted on paying rent or on other loans in the past. They aren’t going to lend you any money, but they want to make sure you have a good record of paying debts. Another example would be when you check your own credit score. You aren’t going to be giving yourself a loan, but you may want to know it so you can try to improve it before requesting a loan. Free credit score companies like Credit Karma, Credit Sesame and Quizzle all use soft inquiries. Soft inquiries can be requested without your permission, and while these may show up in your credit report, they aren’t detrimental to your credit score in any way like the hard inquiries can be.

Why Do Hard Inquiries Hurt Your Credit Score?

A single hard inquiry shouldn’t hurt your credit score too much. It might take a few points off of it, but this usually isn’t any concern in the scheme of things. If, however, you have several hard inquiries in a short period of time, this can send up red flags that you’re having money issues. When the credit bureaus see several hard inquiries in a short period of time, the assumption is you may be in dire need of credit or there’s some reason you aren’t qualifying for credit. Both these are seen as greater risks of you not being able to pay back loans or credit, and thus your score will fall.

Will Using Credit Karma, Credit Sesame or Quizzle Hurt My Credit Score?

Since Credit Karma and other sites like it use soft inquiries to give you your credit score at no cost, they won’t adversely affect your credit score. The credit bureaus know that soft inquiries are for informational purposes, not for trying to get more credit, and thus they are usually ignored by the credit bureaus when it comes to your score, even when there are a number of them made over a short period of time. For this reason, using free credit score companies that use soft inquiries to get your score won’t end up hurting it.

How Credit Karma, Credit Sesame and Quizzle Can Help You Save Money

October 27, 2014 By Lori Kelley Leave a Comment

How Credit Karma, Quizzle and Credit Sesame help save money

The fact is that many people don’t pay much attention to their credit scores. In this day and age, the ability to comprehend how your credit score can benefit or hurt you is important to learn. If you don’t have the best credit or even know what your credit score is, you can attain the needed knowledge on how to improve your credit score by visiting sites like Credit Karma, Credit Sesame and Quizzle.

Credit scores can affect your life in many aspects. Primarily, your credit score affects the qualification of whether or not you will be able to get a loan for either a car or a home, but it can have an influence in many other ways as well. Of course, getting the loan is based on other criteria as well, but if you have a poor credit score, then you can be sure you’ll have to pay a lot more in interest for a loan, if you’re even able to get one at all. You might even have to find a suitable co-signer, which may prove to be difficult.

If, on the other hand, your credit score is in good standing, then you’ll be offered better terms, such as lower interest rates from lenders. When you go to purchase a car or home, you won’t have to stress about having to spend more money just because you let your credit go downhill. In fact, because you have great credit, you will be saving money in the long run. With the lower interest rates, it will take you less time (and less money) to pay off this debt potentially saving you thousands, or even tens of thousands, of dollars.

While sites like Credit Karma, Credit Sesame and Quizzle are best known for giving their customers their credit score at no cost, this isn’t the real benefit they have for most people. Yes, knowing your credit score is important, but even more important is learning how the actions you take affect your credit score in a positive and negative way. By gaining a better understanding of how your credit score is calculated, and how the actions you take will affect it, you are in the driver’s seat in determining your future score. All these free websites help educate you to better understand your score, and what steps you need to take to make it better.

In addition, Credit Karma and sites like it offer tools to their users to see how specific actions can help or hurt their credit score. This allows you to input a number of different scenarios, and to see what happens to your score with each. It also allows you to see results even before you take an action so you can make better decisions before the act. This can help you avoid making a financial move that could hurt your score and ultimately cost you more money.

By helping you better understand about how credit scores work and how the actions you take can effect them, the free credit sites help you to save money by helping you improve you credit score.

Credit Karma vs Quizzle: Which is Better for Free Credit Scores and Reports?

September 22, 2014 By Lori Kelley 16 Comments

Credit Karma and Quizzle: whihc is the better free credit score company?

There are so many websites out there that promise free credit scores and free credit reports. The problem is many of them walk the tightrope of being scams, and only a few of them tend to deliver on their promise. Credit Karma and Quizzle are two credit reporting websites that, for the most part, actually delivery on their promise of no cost credit scores and reports. While both deliver, they aren’t identical, and there are a few differences which exist between them.

What is Credit Karma?

Founded in 2008, Credit Karma is a website offering free credit and financial management services. The site provides free credit scores, free credit reports, and credit monitoring from TransUnion. When you visit this website, you can access your TransUnion credit score and reports at no cost. All the services offered at the site are completely free, and there is no need to pay or give your credit card to access any of their services. They are a legitimate site offering a solution to allowing you access to credit score and reporting.

What is Quizzle?

Just like Credit Karma, Quizzle was also launched back in 2008. Quizzle is also in the business of offering consumers information regarding their credit score and their credit standing at no cost. The site also doesn’t require a credit card or any other form of payment to access the services they provide. They are a legitimate company which offers consumers free access to their credit score and report.

What is the difference?

One can’t help but ask what are the differences between Credit Karma and Quizzle. The most significant difference between the two is the credit agency they use to create your score and report. Quizzle makes use of the credit agency Equifax, while Credit Karma makes use of the credit agency TransUnion. Since each of the three credit reporting agencies (Equifax, Transunion and Experian) are different, what their scores and reports contain can be different from the others.

Another difference between Credit Karma and Quizzle are the types of credit scores each provides. Of the two, Credit Karma offers consumers four scores (TransRisk Score, TransUnion Home Insurance Risk Score and TransUnion Auto Insurance Risk Score and VantageScore) while Quizzle only offers the VantageScore through Equifax. All these scores from both companies are FAKO scores.

Both companies also offer free credit reports, but again, these are from different credit reporting agencies. Consumers get their credit report from TransUnion when using Credit Karma, and it can be accessed as often as once a week. Consumers get a report from Equifax when using Quizzle, but can only have access to it every 6 months.

Of the two companies, Credit Karma is generally regarded as having the better combination of credit tools and access to the scores and reports, but a lot depends on the consumer’s individual needs. It also depends a lot on which credit bureau they want to see the information obtained from (Experian free credit score information can be found at Credit Sesame). While in general terms the two companies appear to be almost the same, there are some key differences which favor Credit Karma over Quizzle for many people.

Six Reasons to Like Credit Karma, Quizzle and Credit Sesame

September 12, 2014 By M. Butler 5 Comments

Reasons to like Credit Karma, Credit Sesame and Quizzle

If you want to find out your credit score these days, it’s a lot easier than it was even a few years ago. With sites like Credit Karma, Quizzle and Credit Sesame, you can find out your credit score by simply signing up with their website. This is important because your credit score can save you money in a number of ways, many of which you may not have ever considered. Below are five reasons to like Credit Karma, Credit Sesame, Quizzle, and other sites like them.

It’s Truly Free

It wasn’t too long ago when it was impossible to find out your credit score at no cost unless you paid money or jumped through a lot of hoops. If you didn’t want to pay to see it, you had to give your credit card and sign up for a one-month trial of a credit monitoring service. It was the introduction of Credit Karma and other sites like it where you could find out your credit score at no cost and without having to give a credit card.

More Than a Credit Score

While all these sites started off by offering no-cost credit scores, they have expanded to offer other information as well. Credit Karma and Quizzle both offer free credit reports while Credit Sesame offers free identity theft protection. You get even more financial information than you thought you were going to get.

Credit Education

Credit Karma and sites like it do more than just give you your credit score. In addition, they have a number of tools and information which can help you better understand your credit score, and how the financial decisions you make affect it. By better understanding how the financial decisions you make do affect your credit score, you’re in a position to be in control of it, and to build the score to your advantage.

Frequency

The free credit score sites allow you to view your credit score and credit report on a regular basis, rather than just every once in a while. For those who are in the process of trying to rebuild their credit, this allows them to see the incremental changes that come with the financial decisions that they make, and how these decisions affect their score over time.

Credit Goals

If you’re trying to improve your scores, the site can help you view and maintain your credit goals. Improving your credit score isn’t a one time thing that magically makes it improve. In order to improve the score, you have to make changes in how you handle your finances as compared to what you were doing before. These sites can help you find a credit score goal, and help you work toward that goal until you achieve it.

It’s Easy

For those who are curious where their credit score stands, these sites are an easy way to find out what that score is. You simply need to sign up with the service, and you can find out what your current credit score is right away. Then if you want to see if it has changed at any point in time, you simply need to log back into the site to find out what your current credit score is. It’s a convenient way to find out your current score without having to pay money to do it.

Is the Credit Karma Free Credit Report a Scam?

August 19, 2014 By Jeffrey Strain 17 Comments

Is the Credit Karma no cost credit report legit or a scam

Credit Karma recently made the announcement they would offer their users free credit reports on top of the free credit scores they already give. The question many people have when they hear about something like the free credit report is, “What’s the catch?” and, “Is it a scam?” The good news is the offer isn’t a scam, and for the most part, there aren’t any catches involved with getting it.

Is the free credit report really free?

Many companies that offer “free” credit reports technically come with no cost, but there’s a catch. In order to see the report, you have to give your credit card and sign up fro a free month of credit monitoring with the company. If you cancel the credit monitoring before the month free trial is up, then you don’t get charged for anything, but if you accidentally forget, your credit card ends up being charged. The FCC also reports that canceling can difficult and not always done the first time you request it to be removed. So while the report is technically free, there’s a catch that can cost you money down the line.

Credit Karma set up their no-cost credit report offer the way they did with their no-cost credit score. There is no need to give your credit card to be able to see the report. They are able to do this because of the way they make money. Other sites make their money by selling the credit monitoring services, but Credit Karma makes its money through offering services where they get a commission if you sign up. These credit scores and credit reports don’t come cheap, as the company spends tens of millions of dollars to get them, but they make enough on the advertising to their users to more than make up for these costs.

Is it a real credit report?

There are some who take issue with the free credit scores from sites like Credit Karma, Credit Sesame and Quizzle because they aren’t FICO scores. There’s a debate as to whether this really matters or not, but it’s a concern to some people. They want to know if the credit report is from the credit reporting agencies or if it’s some type of other credit score.

In this instance, the credit report given is from TransUnion, and it’s the credit report you would get if you bought it directly from them. While it is a real report, it’s only one of the three main credit reports available. You do not have access to your Experian or Equifax credit reports from the site, although you can get a free Equifax credit report from Quizzle. You can also get your credit report at no cost once a year (plus in some other specific circumstances) from AnnualCreditReport.com (you can see how the Credit Karma and AnnualCreditReport offers compare here).

How often can I see my credit report?

Many people wonder if the credit report is a one shot deal. That is, once you’ve seen it one time, then you can no longer see it again to see if it has changed in the future. The answer it no, it’s not a one shot deal. In fact, you can access your updated report as frequently as once every week if you desire.

Conclusions

The Credit Karma free credit report is not a scam or a bait and switch program. The only catch is that in order to get it, you will be given a lot of advertising offers (this is how they make their money) which you can choose to accept or decline. You won’t have to give your credit card to access the report, but you do have to give them sensitive financial information, which comes with some risks.

(Photo courtesy of Colin Kinner)

Credit Karma vs Annual Credit Report: Which Is Better?

August 11, 2014 By Jeffrey Strain 23 Comments

credit karma versus annual credit report

With the announcement that Credit Karma now offers free credit reports in addition to free credit scores, there are a number of people wondering how it compares to the government mandated free credit report site, AnnualCreditReport. For those looking to get a free credit report, here are a few things you need to consider when choosing one or the other.

Number of Reports

The first thing to note is Credit Karma only gives users access to their TransUnion credit report. This is important because there are actually three main credit reporting agencies: TransUnion, Experian and Equifax. Each credit reporting agency is different than the others, and what is contained in each of their reports can differ from the others. That means when you see the free credit report from Credit Karma, you’re only getting access to one of the three credit reports on you out there. You can also get a free Equifax credit report at Quizzle, but again, it’s from only one of the reporting agencies. AnnualCreditReport gives you access to all three credit reports at no cost.

Frequency of Report

As a general rule, you’re only allowed to get a credit report once a year at no cost from AnnualCreditReport (there are some exceptions). Since this is a long period of time between seeing what is happening on the reports, many people request a report from one of the three credit bureaus every 4 months, giving them a better chance to catch something if it’s not right on the reports.

Credit Karma, on the other hand, gives access to the TransUnion report much more frequently. You can access it as often as once a week. This makes it much more likely to catch a discrepancy on your report quickly so you can resolve the issue right away, plus stop any identity theft before it mushrooms into a bigger problem. The caveat being that these discrepancies are showing up on the TransUnion report and not the Experian or Equifax reports.

Security

In order to get access to your free credit report, you have to give some sensitive financial information, such as your social security number, to access it. While the past doesn’t indicate what will necessarily happen in the future, Credit Karma has been lax with user’s financial information with their mobile app which exposed the information and allowed for the possibility of it being stolen by identity thieves. Credit Karma has settled this issue with the Federal Trade Commission and is being monitored on the issue. AnnualCreditReport hasn’t had the same type of security lapse.

Extras

AnnualCreditReport does only one thing; it gives you access to your credit reports. You don’t get access to your credit score, you don’t get credit monitoring and you don’t get a lot of advertisement offers for other stuff. Credit Karma does offer more, including free credit monitoring, no-cost credit scores and tools to help you better understand how what you do affects your credit score. It also comes with a lot of advertisements for other services since this is how they make their money.

While it would seem that since both these sites are offering free credit reports, the two would be similar in a lot of ways, but the reality is both are quite different from one another. Which ends up being better for you depends a lot on what you plan to do with the credit report. Both have advantages and disadvantages which need to be considered when deciding which is best for you.