How to Use Credit Karma to Build and Monitor Your Credit Reports

Your Credit report is a very important part of your financial life in the USA. I have written about this here. One of the services I recommended there is CreditKarma.com. It is a free service that lets you monitor your credit report every week.

Here’s a good explanation of how your credit score is built: https://www.creditkarma.com/credit-scores.

Here’s how to use credit Karma to build and monitor your credit report:

Sign up at CreditKarma.com

It’s easy to sign up at CreditKarma. You just need your email address and create a password to use. You will also need to provide your Social Security Number because that is the information they need to start building your credit reports and send it to you. The awesome thing is that this service is free!

If you decide to sign up with any of their recommended credit cards or personal loan providers, then they make some commission from your business.

Monitor your credit reports at least once a month.

Credit card companies, lenders, and other sources of loans usually report your balances and other credit factors to the credit bureaus. Besides, this is a good habit. Identity is a real problem in America. If your credit card is stolen or your social security number is compromised, someone may use it and will destroy your credit history.

Check the credit factors they report.

CreditKarma provides report from TransUnion and Equifax. They also report all the different factors that contribute to your credit score. These are the following:

  • Credit Card Use (High Impact) – are your credit card maxed out?
  • Payment History (High Impact) – are you paying on time?
  • Derogatory Marks (High Impact) – did you file for bankruptcy? Has your account been sent to collections? Did you file for bankruptcy or is there civil judgment on your account?
  • Credit Age (Medium Impact) – how long have you opened your accounts?
  • Total Accounts (Low Impact) and – how many open and closed accounts do you have?
  • Hard inquiries (Low Impact) – How many times have you applied for credit?

Do something about it.

Don’t just monitor your credit factors, though. Do something about it. Credit Karma often provides recommendations on how you can improve your credit score so it will move to the next level.

You can pay off your credit cards, decrease your spending, or earn some extra income. IN short, you need to put your financial house in order. It can be difficult, but it can be done. There are a lot of personal finance blogs out there to help you do just that.

Lastly, creditkarma recommends some products depending on your profile and your credit score. Please do your due diligence and research before committing to anything.

As always, this is not financial advice but is only general information. If you need help with your personal finances, consult a professional.

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