I want to tell you all today about a tool I use called Credit Karma. I’ve turned a lot of friends onto this (even my mom) and it has helped them a lot in their finances, so I thought it was important enough to give it its own article.
With Credit Karma I can track my credit score and it also lets me know about other cards that are out there that I would qualify for. As a young college student, I had to recently start from the bottom (like Drake) to actually get one of the great travel cards that are out there and Credit Karma did wonders to help me a long my way.
Without them I wouldn’t have known to start with a Secured Mastercard from Capital One. Once my credit score was high enough after a few months, I was able to move onto a Barclays travel card to begin enjoying the benefits of the point system. What Credit Karma does – and why I decided to give it an entire article rather than a blurb – is it gives you a score for completely free that doesn’t negatively impact your score, meaning it doesn’t even show up on the records that you checked it! Generally when you go to apply for a loan, whether from a car or a house, the bank will check your credit score. Every time this happens your score will drop five points. You get to completely avoid this issue when you go through Credit Karma. Plus, they update your score once a week, which is a huge bonus. When they tell you your score, they break it down into sections so you can see where you need to improve.
Your credit score is determined by six factors: credit card utilization, payment history, derogatory marks, age of credit history, total accounts, and credit inquiries. For me, my credit history is very young (I’m still under the two-year mark!), so I’m slightly negatively affected by that as well as the total accounts that I have open because it is under six. The breakdown makes it very easy to see where you need to improve. For instance, if you’re spending more than 20% of the limit of your cards, that actually hurts your overall credit score, so it may be wise to pick up another card so your overall limit is higher. I actually did this and it increased my total score by 30 points and I no longer worry about overspending, which was a concern every time I had to buy textbooks or pay for tuition.
They don’t just tell you your score though, although that is mainly what I use them for. They also let you know about any loans that you have out (as a student I appreciate this), any current credit card balances you have, and what cards/loans you qualify for. They have a huge database for every credit card on their website, so before I apply for any, I’ll double check on their website first to see if they believe I’ll qualify for it. It really takes the risk out of the game to help you keep a healthy score that isn’t battered by hard inquiries that take two years to go away.
This is really an all-in-one financial center that you can utilize for absolutely nothing. Lastly, they have a lot of cool tools that can help you calculate things from home affordability to paying off your debt.
If you’re a college student, a new traveler, you’re trying to pay off debt, or you simply want a great way to keep up on your expenses, I highly suggest checking out this website. It’s pretty easy to get set up too. I will add that I wasn’t paid to write this article about them or asked to, I just really enjoy using their website and I love sharing all of my little budget tricks for traveling!
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