Do you have a strong desire to own a home? Have you seen advertisements on television or the radio and wondered what Credit Karma was all about? You are not alone, as many folks wonder what exactly they do. Credit Karma has become very popular with users, and they have over 100 million accounts, for a good reason.
They help their users stay on top of their credit score, understand potential financial problems, and receive notifications like a collection agency checking your accounts. Credit Karma also helps users find the best loans and insurance deals for them, and they do all this for free.
If you have a strong desire to become a first-time homebuyer but have marginal credit holding you back, Credit Karma could be a godsend. Their system helps by showing you how your credit decisions have a direct result on your credit score. Instead of making poor uninformed choices that can negatively impact your financial standing, Credit Karma points you in the right direction.
So many people do the wrong things when it comes to credit. For example, one might think that canceling a credit card might improve your credit score when it is the exact opposite. With Credit Karma, you won’t have to worry about making poor decisions like this. By following their sound advice, you’ll get yourself in a position to buy a home much quicker.
Real Estate agents can help first-time buyers in several ways, and Credit Karma should be right at the top of the list for those who need some credit building assistance before moving into the housing market.
Let’s take a look at how Credit Karma works and what you need to know.
Using Credit Karma
When setting up your Credit Karma account, you will need to provide some information, including your name, address, and social security number. Since the site is holding on to some sensitive information, you’ll be pleased to learn they do have some good security included. You can turn on two-factor authentication to keep your account more secure.
It is also helpful to tell Credit Karma about any loans you have. If you have a car loan, you should give them details about your car and the mileage so that they can assess the value. This could help you find a better deal on insurance or offer refinance options.
Providing information about your mortgage could also similarly help you. You might be able to take advantage of reduced interest rates to decrease your monthly outgoings.
Once you’ve set up your account, your dashboard will be your starting point. This gives you your credit score clearly at the top of the page, indicating how good your credit looks and a history of the graph’s changes. They take their data from two of the three major credit bureaus, Equifax and TransUnion.
The dashboard has links to other parts of the site with more information about your accounts, housing, autos, as well as savings, and credit. There is a link to help you prepare for tax time, with federal and state information and forms.
Monitoring Your Credit Score
The site gives you access to information on your score from the two credit bureaus, though these might not be the same, however. This is because lenders don’t necessarily report all the information they have to all the credit bureaus. The bureaus may also update their details at different times, meaning recent changes may not show up simultaneously across the board.
To find more in-depth information, click on the “Score details” link. This gives you a 4-month graph showing the changes to your score, and you can switch between Equifax and TransUnion to see the different changes.
This page will also show you the things that are having the greatest impact on your score. How much you use your credit card, your payment history, and negative remarks make up the largest factors. Hard inquiries on your account, the number of accounts, and their average age are considered less important factors when creating your score. Click on those links to find out more information about how those factors are affecting you.
Improving Your Score
You can take a look at your credit report as well, and there is a link there that lets you see how you can improve. Clicking on the “See my plan” link provides you with a set plan that should increase your score by a certain amount.
They also offer a credit score simulator tool to show you what certain things will do to your score. This will better equip you to decide whether it’s a good idea to apply for a new loan or increase your credit limit, among many other possibilities. It will also show you what your score is likely to be if you pick one of those options.
They offer several other tools to help your financial situation as well. These include interactive calculators to help when refinancing your mortgage, credit card comparisons, and recommendations to improve your finances.
These tools can be used to attain what most lenders consider a good credit score. Homeownership will be closer to reality when you are religious about improving your credit standing.
One of the things that all first-time homebuyers should know is how critical your credit score is in relation to the terms and conditions you’ll receive from a lender. All things being equal, a bank or mortgage company will give you much more favorable interest rates when you have a sterling credit history and score.
Final Thoughts on Credit Karma
Credit Karma offers a lot to consumers, providing useful information that can make your financial situation better. This service is even free and is supported by advertising as well as through the offers they show to users.
If you are someone who has a strong desire to break free from renting an apartment and want to join the ranks of ownership, Credit Karma is worth investigating. There are not many places where you can get such great financial information at your fingertips without any cost to you. All you have to do is tolerate seeing advertisements, which is certainly worth it in the grand scheme of things.
Hopefully, you have found this guide to Credit Karma to be useful.
About the author: The above article on how Credit Karma is great for first-time homebuyers was written by Bill Gassett. Bill loves to share his expertise with buyers, sellers, and real estate agents alike.