Last week, I took you through all the ways and reasons to track down your free credit report, and I teased you a bit by saving that you can also get your credit score for free, but I wouldn’t tell you how… until now.
Remember how credit reports are like annoying report cards that show everything except your grades? Well, if you want to check out your actually credit "GPA," you’ll need to get your credit score. Usually, you have to pay for this service – either through one of the three credit reporting companies (Experian, Equifax, or TransUnion), or you can get any of the three (or all three) through MyFICO.com.
If you go the paid route, you can either get one score right now for a low-ish price (about $15), get all three scores, or you can sign up for credit monitoring, which is where you get one of your scores, and updates sent to your email or phone when it changes. (My mom gets the updates texted to her phone from MyFICO – it’s kinda weird, actually.)
Or, you could get one score, anytime you like, for free.
Credit Karma
I was highly suspicious of Credit Karma when I first heard about it. The claim of a free credit score sounded exactly like something that would come with a huge catch. The jingles from not-actually-free-FreeCreditReport.com started playing in my head, and I stayed away from Credit Karma for quite some time.
But, more and more sites started recommending Credit Karma – and some of my friends, too. So I decided to finally sign up and see how good it is.
Credit Karma is ad supported, so the ads on the site pay the bill that you would normally pay to get access to your score. You only get access to your score from one out of the three reporting agencies – TransUnion. And yes, there are a lot of ads. But the layout is pretty clean, and there don’t seem to be any pop-ups or anything, so it’s not a big deal. And the ads all seem to be for reputable companies, like Upromise.
So you give them your personal information (they’ll need it to get your score, and it doesn’t seem to be an excessive amount of personal info), and they give you your score. You seem to be able to hit the "Update my Score" button daily, but your score will only change when something about your situation changes, so you probably only need to check it once a month.
Credit Karma also offers a "credit simulator" tool, so you can play around with what would happen if you paid off all your debt, or missed a payment… it kinda works, but not as well as some other credit simulators I’ve seen (like the one you get with MyFICO).
All in all, I like Credit Karma. You pretty much get just your score, and a little explanation. Although, I noticed the explanation for mine was incorrect – it said I had too many accounts where the balance was close to my limit (lies) and too many last payments (also lies, I’ve never had a late payment). [Credit Karma founder Kenneth Lin came by to say that the better your credit score, the less accurate this is likely to be – my score is pretty shiny, so that’s why it’s inaccurate for me.]
The score seems correct though, based on my credit history. If you want a second free way to "check" your credit score, Bankrate.com offers a credit score simulator that you can use.
This is VERY important to do once your loans begin repayment. Especially if you have moved. One of my loans was reporting 240 days deliquent on my credit report. I had moved for my frist job after school and called all of my loan companies and school to notify of the change of address. One of my loan companies failed to change the address and therefore was not sending me any statements. Since I had just come out of graduate school I assumed that loan wasn’t in repayment yet.
In the mean time my credit score was poor due to this deliquent reporting (and near collections for the loan). I had no idea, since I had only checked 1 of the 3 reporting bureaus. In the mean time I had applied for a car loan and got a not so great interest rate. I also had been denied a private student loan consolidation because of it. This is probably the worst part, because now private student loan consolidations are extinct and I am stuck with my current terms.
This is great! You can also get your free, Experian score for a limited time, as decribed on My Money Blog. I just did it this morning and it worked great. Now I wonder how it will compare to my TransUnion?
Stephanie,
Thank for the post about Credit Karma. I can certainly understand your apprehension about using our service and am glad that you finally decided to try it. I do want to clarify 2 points in your post.
1) The score is updated real time every time you request it (not every 30 days). If you don’t use your credit actively, your score should be fairly consistent. Perhaps that is why you don’t perceive many changes.
2) The explanation that you referenced is directly from the credit bureau. These factor codes are used when a person is denied credit. It is a requirement by law. For people with good credit, the factor codes tend to be less useful for obvious reasons.
I hope your readers like our service. We have a slew of new free features planned, so stay tuned.
Ken
Founder, Credit Karma, Inc.
@Ken – Thanks for coming by the site! I’ve updated the entry to reflect your clarifications. I am glad I tried your service as well. I think it’s just perfect for college students who would do well to know there score, but don’t have the cash to pay for credit monitoring services. Thanks!
I was skeptical too when I first heard of Credit Karma.. luckily I tried it out and I absolutely love it!
Thank for the post about Credit Karma. Certainly has shed a bit of light on the subject. For me anyway.
This is a great post. Here’s a question for you. I currently have $20,000 in student loans (some of which are private), and estimate getting about another $10,000 before I graduate. I’m wondering if it makes more sense to save a little bit of money and use it to try and pay out of pocket the last year I have (in order to minimize that $10,000 I might have to take), or just save until I graduate and use that money to start paying off my final loan amount (which will be about $30,000+).
@Natalia – that depends on whether your loans are accumulating interest while you’re in school. For example, I have some Federal Unsubsidized loans, which accumulate interest (or as I like to say, “grow like mold”) while I’m in school.
If you have loans like that, it’s better (math-wise) to use that money to pay out-of-pocket for school directly. If you don’t have any loans like that (in other words, if none of your loans are going to accumulate interest until after you’ve graduated), you can earn some interest yourself by keeping that money in a savings account until after graduation. Hope that helps!
Thanks for the info on credit karma. I think that we can all use some good karma where our credit is concerened. It is important that we know our credit score, what we can do to improve on it and our chances of getting that huge bank loan. Credit rating is one way for the various agencies to rate us on our dependability, naturally the credit rating plays a big role when it comes to getting the loan. Thanks once again for the info! π
Thanks for all the kind words about Credit Karma. It it encouraging for me and our team to see members find value in the tools we are building.
Great site, Stephanie. π
I love creditkarma as well, it’s great.
You get a monthly email that will remind you to check your score as well.
It’s a great site!
Having bad credit can really be a karma for borrowers because it is extremely difficult to escape the bad credit cycle that high cost debt generates damaging your credit even further and making it increasingly difficult to obtain financing at a fair price.
The thing about having bad credit is its a never ending cycle that can stop you from reaching your dreams. Credit Karma can help you stay on top of your credit in ways that makes it so much easier, it worth looking into.