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Credit Karma Secrets

Credit Karma Secrets – Three Secrets Credit Karma doesn’t want you to know…

My Journey to Better Credit

Before revealing 3 Credit Karma Secrets, I want to quickly introduce myself.   Hi, my name is Chris. I want to share with you a story about my credit journey.  You see I made some mistakes in my past and spent too much of my adult life with limited access to credit.  When I traveled on vacation, I checked in using my debit card. I had to pay cash for large purchases. I missed out on easier ways to do things.

Like many people who find their way curiously onto the Credit Karma website, I was looking to learn and improve my credit score. Finally, one day I decided to get serious about my credit because a wanted to buy a newer car.  I learned that I needed to address some blemishes on my credit.  I started to learn about credit repair and during this process, I learned so much that not only did I want to share it with you. I also got so good at this, that I opened my own business so that I can help people improve their credit.  More about this later. Ok, where was I?  Oh yeah, my Credit Karma experience.

#1 Secret = More Visits More Often

Has this happened to you too?   The other day I received an email that said “Congratulations, your credit score went up”.  I thought to myself  “Wow, really? How much?” as I clicked to login and see some good news for a change.  Ok, Ok, Credit Karma, you got me… I fell for it again, really a 1 pt change?  Feeling a little embarrassed and disappointed, I realized what just happened.  They hooked me into logging on to their website because they need the frequent traffic to see their credit card offers. Why? Because they make their money by advertising high interest credit cards to people with less than perfect credit. Apparently, their tactics are working. I did a quick search using a fantastic web traffic analysis tool by Neilpatel.com  Surprisingly, this was one of the first Credit Karma Secrets I discovered.  Credit Karma’s website traffic has about 7,000,000 visitors per month and growing!

#2 Secret = Free Scores are Not Always the Best Scores

Here is another observation I will share with you. The free scores they offer you and the advice is not always accurate or what it appears to be.  Do you know something that I see so many clients who use Credit Karma looking for?  Help with Inquiries. Here is the scenario; They go shopping for a car at a dealership.  The dealer has them fill out an application for financing. Then that application gets shopped to several lenders.  Boom! The hard inquiries start to pile up. Maybe the client gets cold feet, the rates are too high, or worse they are not approved for what they want.

Next they go home and often out of curiosity check Credit Karma for an update.  The dashboard shows them a red indicator that they had more than 5 Hard Inquiries. And it usually says something like “We noticed a lot of hard inquiries” and “Hard inquiries from things like credit applications can stay on your report for up to 2 years, but their effects tend to fade over time.

Ok the truth is yes hard inquiries stay on your credit for up to 2 years.  But did you know that they have a small impact on your score for only 12 months? And the credit scoring models allow for something called rate shopping?  This means that if you are shopping for a car or home, you can actually shop for the best rates and offers and as long as those hard inquiries occur within a short time frame, they all should count as one?

According to Transunion, in the following article about rate shopping, for the VantageScore and Vantage Score 3.0 models, inquiries made within a 14-day period count as one. FICO treads multiple inquiries in a 45-day period, as one.  Why did Credit Karma not explain this?  Well let’s just say the second Credit Karma Secret is they want to show you more subprime lending and card offers.

#3 Secret = They Make More Money Selling You Subprime Cards

A few years ago, I had a derogatory account on my credit history. Credit Karma showed me three credit card offers, that they indicated, I had a good chance of qualifying for based on my credit score.  The three cards were lesser known brands, and all of them had high fees.  During the course of my credit rebuilding, I was successful in raising my personal credit score by 100 points.  Do you know what really irritated me?  Credit Karma showed me the same three credit card offers that they showed me when my score was lower.  Why? I thought to myself.  Then it hit me.  They must make more money showing me these high interest card offers.  How could a company that provides free reports earn $500m per year in revenue? Shhh, that is Credit Karma Secret number 3.

The Bottom Line

In summary, Credit Karma provides a useful purpose to bring awareness to many people about the importance of good credit. As long as you don’t let them get you down or discourage you from focusing on the basics of making steady improvement of your credit score.

Remember, improving credit takes time and expertise.  At Credit Fitness Coach, we advise you don’t obsess over daily score changes, but do monitor your progress monthly using a 3-bureau report that shows your actual scores from Experian, TransUnion, and Equifax.  Our favorite way to do this is with a credit monitoring service like IdentityIQ. They offer a 3-bureau report for just $24.99 per month which gives you alerts and includes identity protection. If you need help improving your credit, Credit Fitness Coach can help.  We offer affordable rates, reliable service and our clients get great results

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Credit Fitness Coach is not affiliated with Credit Karma or www.creditkarma.com

Credit Karma, TransUnion, Equifax, Experian, FICO, and Neil Patel are trademark of their respective holders.

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