How To Use Credit Karma to Check your Credit

Camino Financial09 Jan 2024
How To Use Credit Karma to Check your Credit
If you spend any time watching television, you most likely have seen hundreds of advertisements for websites telling you how to use Credit Karma and other credit reporting services to check your credit score and your credit report. Like most commercials, you probably fast forward through it without a second thought. But these commercials may be a bit more important than the latest flash sale at a clothing store. The truth is that your credit score is critical to many aspects of your life, and checking up on it regularly should be routine for any business owner. We'll show you how to use Credit Karma and how to make the best out of this tool.

What is Credit Karma?

Credit Karma is a financial management website that provides a ton of free benefits to its users. It gives users a credit score and a credit report weekly. It also uses data analytics and financial models to determine the best credit cards, business loans, and other financial opportunities for the user's personal needs. Credit Karma offers additional services like credit monitoring that tells you when your credit score changes dramatically (which can help spot instances of identity theft), financial calculators, and educational articles on how to manage your finances. Finally, you'll find a collection of user reviews on business loans, credit cars, car payments, and more. And since Credit Karma gets paid by businesses when users take a credit card or loan based on Credit Karma's financial recommendations, all of the services offered on this website are entirely free of charge. Let's see now how to use Credit Karma so you can take advantage of all the benefits mentioned above.

How do I get my credit report from Credit Karma?

Fortunately, you do not need to spend hours trying to figure out how to use Credit Karma. Just visit their website: all you will need to sign up is a valid email address and some personal information, including:
  • your full name
  • address
  • the last four digits of your social security number
Credit Karma will have you quickly confirm your identity by answering security questions, and then you will be all set. Once you create your account, Credit Karma will quickly pull credit reports from TransUnion and Equifax and will pull up a screen that looks like this: Sample credit score from Credit Karma
Did you discover your credit score is sub-par? Learn how to build your credit
From here, you can take a look at your account balances, including:
  • all of your credit cards
  • business loans
  • mortgages
  • auto loans
  • student loans
  • and more
You can also see recommendations for credit cards and other loans you are most likely to be approved for based on your credit score. You can also click either score to see the factors impacting it, which you should undoubtedly do if you want to maintain or increase your credit score. As you can see, thankfully, it's not hard to learn how to use Credit Karma. Be sure to check your credit score every week or so to see any changes.
#CaminoTip Credit Karma will typically email you frequently notifying you that your new score is available, so make sure those emails don’t go into your spam folder!

Other Ways to Check your Credit Score

Credit Karma is a free option, but it's not the only way to know and understand your credit score. The three leading credit reporting agencies in the U.S. are the ones that determine your credit score: Equifax, Experian, or TransUnion. These three credit agencies require a monthly subscription fee (usually close to 20 dollars), but thankfully they each offer one free credit report to consumers per year. If you really want to see the differences in the reports, you can request all three credit reports simultaneously. However, for most people, it is recommended to spread out the credit reports throughout the year to get a better idea of how your credit score is changing over time.
Check here how to get your free credit report from any of these agencies.
The problem with using the main credit agencies is that you may need more than three credit reports a year to accurately get an idea of how certain events and actions affect your credit score. That's why Credit Karma is such a good option. But what if, when you request your credit report, you realize the score is poor?

Credit Karma FAQs

Is the Credit Karma Credit Score Accurate?

While the score you will find in Credit Karma is pretty close to the real deal, it's not 100% accurate. Why? Well, they only use the information of 2 credit bureaus, and not from all 3, and they only update the scores once a week. This could result in slight changes when compared to the credit scores you'd get from a credit bureau.
What are the 3 credit bureaus?

Is it Safe to Use Credit Karma?

Fortunately, Credit Karma is a very safe platform. They are very serious when it comes to keeping your information safe and private.
  • They use encryption to keep it away from prying eyes.
  • Their security team is always ready to avoid any problems before they arise, and if they do, they start fixing them ASAP.
  • They don't share your information with anyone unless they get your permission.
  • Their team is also constantly looking for vulnerabilities in their system to fix them.

Is it Bad to Check Your Credit on Credit Karma?

Many people are against using Credit Karma because they think the platform gets credit scores through a hard inquiry (which would affect their credit), but the truth is that Credit Karma uses a soft inquiry, which means it doesn't affect your credit score.
The difference between a hard inquiry vs soft inquiry

Can I check my credit with an ITIN?

Experian is the only credit bureau that allows you to get a free credit report if you only have an ITIN. The downside is that you will not be able to do it online, you'll have to make a request in writing. In the application, you must include your name, ITIN number, date of birth, and the addresses where you have lived in the last two years. You will have to send your application with the following documents:
  • a copy of a government-issued ID (driver's license, State ID card, or similar), the ID needs to have your address
  • a copy of a utility bill, bank or insurance statement, or similar
Send your request to: Experian P.O. Box 9701 Allen, TX 75013 Another option is a tool called Credit Sesame. When registering, you will have to input your ITIN instead of your social security number.

What is a Credit Score?

A credit score is like a grade that says a lot about your credit risk. Credit risk is the likelihood for a person (or entity) not to meet the conditions of a debt (otherwise known as defaulting on debt). Defaulting on any debt will have significant consequences for the person defaulting, but it can also be a pain for the entity providing the loan.

Why Should You Care About Your Credit Score?

Because people with a bad credit score usually default, financial institutions won't lend to them.  If you have a poor credit score, you will have a tougher time leasing a car, buying a home, or getting any sort of loan. Do you want to apply for a loan and do not know where to start? Apply with Camino Financial. Get Approved For A Loan Today For business owners, a low credit score could mean rejections or poor rates when trying to lease an office or while applying for business loans.
Learn here more about the benefits of a good credit score.

What Your Credit Score Means

Another critical aspect of learning how to use Credit Karma efficiently is knowing what your credit score means and how it is calculated. Each credit bureau has a slightly different way of calculating scores, but they all are based on a standardized scoring system provided by credit modeling company VantageScore. The VantageScore model will give you a score between 300-850. The score has different possible ranges:

Excelent business credit score750-850 Excellent

Best rates and most favorable terms on any type of loan.

Good business credit score700-749 Good

Good chances to get credit at competitive rates.

OK/Fair business credit score650-699 Fair

Fair chances to be approved but likely not at competitive rates.

Low business credit score550-649 Poor

Slight chances to be approved, but rates may be unfavorable.

Bad business credit score300-549 Very poor

Slim to no opportunities to get credit.

What Goes Into Your Credit Score

Knowing your score is crucial. Several factors impact your credit score, and not every factor is measured equally. The great feature of Credit Karma is that it allows you to know what actually goes into it. With Credit Karma, you can easily visualize how each credit factor affects your credit score (organized from high to low impact), so you can take the measurements to improve those areas you consider. Below you'll find a breakdown of these factors: Credit Karma credit score Credit Karma chart exemplifying how it works
  • Credit card use

This refers to the percentage of credit used on your credit card. Leaving a balance on your credit card close to your credit limit will harm your credit score.

Typically your credit card balance should never be more than 30% of your credit limit. If you struggle to maintain that, you can try asking your financial institution to raise your credit limit.

  • Payment history

Your credit score's most influential factor is how often you make payments on credit cards or loans on time. It is imperative to make all payments on time, and a failure to do so could have very negative consequences on your credit score.

  • Derogatory marks

These are negative, long-lasting indications that mean you didn't pay back a loan as agreed.

Late payments, collections, and bankruptcy will have a high and negative impact on your credit score. Also, a large number of debts could negatively influence your credit score.

Again, make sure to pay off your debts on time, and consider refinancing to get better rates (Credit Karma will notify you when these opportunities arise!).

  • Credit age

This refers to the length of time you have had accounts open, and while it doesn't have such as high impact as the three previous factors, it will also affect your credit score. In general, older accounts will lead to a higher credit score.

  • Total accounts

The number and variety of credit you have. A variety of credit accounts (car loans, credit cards, mortgages, etc.) will lead to a higher credit score.

  • Hard inquiries

Hard inquiries are the least influential factor, but they can still impact your credit score. Most credit inquiries happen when you try to open new accounts, like when applying for a mortgage, car loan, or business loan.

The key is not to open multiple accounts in a short time, as that will lead to many credit inquiries and can lower your credit score.

For a more in-depth look at the different credit factors and how they can affect your credit score. As you can see, learning how to use Credit Karma is incredibly important, so why not start today?

How to Improve my Credit Score

As a small business owner, you know how important it is to have a healthy credit score—it can help you get great loans to grow and thrive—but you also know getting there is not that easy. Or is it? While improving your credit score is not a quick process, it's not that complicated. There are some things you can d0:
  • Get a secured credit card
  • Purchase electronics with installment payments
  • Consolidate credit card debt into an installment loan
  • Never exceed 30% of credit capacity
  • Pay off credit card balances each month
These are just some easy ideas that can help you on your journey. But the most important thing is that you know that you'll get an excellent credit score if you work hard at it. The credit score is not a mythical thing that's hard to understand; it's quite easy once you get the gist of it. If you want to improve your credit knowledge, why not visit our Credit Score resource center?

Business Credit Score FAQs

What is a business credit score?

A business credit score is a concept similar to a personal credit score but applied to a business. Likewise, the higher your business credit score is, the higher your company's likelihood to pay off debt on time. Having a good business score is crucial when applying for business credit cards or business loans.

What is a good credit score for a business?

Whereas your personal credit is based on a 300-to-850 scale, business credit scores are often based on a 1-to-100 scale. A score of 75 or higher is considered excellent.

How do I check my business credit score?

You can apply directly to the three main credit bureaus to receive a complete business credit report. It's a very simple and straightforward process.

Can I check my business credit score for free?

You're entitled to get one FREE credit report every 12 months from each of the three credit bureaus. Just like with personal credit, if you need to check it more often, you'll have to pay a monthly fee. You can access the prices here. Alternatively, you can use Nav.

Credit Karma for Business: Does It Exist?

There is not a Credit Karma platform specifically designed for business. However, Nav is a similar tool that pulls your business credit score from the three main credit bureaus (Dun & Bradstreet, Equifax Business, and Experian Business), and best of all, it is free. After submitting your basic information, you'll have access to your business credit score at any time and at no cost.

How can I build my business credit fast?

If you just received your credit score and it's sub-par, well, don't worry! There are ways to improve your credit score relatively fast. You can boost your credit score by 60 points in 60 days.

Plan for the Future!

We hope that this article has shown you how to use Credit Karma and the importance of keeping track of your credit score. We recommend checking it often to stay on top of your credit score at all times. A healthy credit score will improve your chances of getting approved for a loan and better terms and rates. If you are ready to take that step, consider applying for a Camino Financial small business loan. You may have worked hard to keep your credit score as high as possible and now are worried about how your application will impact. No worries! Your Camino Financial online application will not affect your credit score, and you will be notified immediately if you are prequalified for financing. Apply now!

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