why are credit karma scores higher

What Is Karma Credit?

Karma Credit is a platform that connects callers to credit bureaus and companies that specialize in credit repair.

What does it mean if I have a bad credit score?

There are lots of reasons why your credit score might not be ideal. Most are related to personal spending habits. The most common example is if you missed payments on your credit card or if your debt levels are too high. If this is the case, you’ll have to make personal changes in your life to correct this. More saving, less spending and consolidation of debts. Unfortunately, this will not be corrected immediately. It will take a few months of strong credit history before you see a change in you score. In some serious cases, negative credit information can take up to seven years to age off of your credit report. This is in extreme cases so call one of our experts so you understand your options and what the next best steps are..

What if my score is bad due to errors or irregularities?

Some times there have been mistakes made my your financial institutions that have resulted in a poor credit score. For instance a ten year old item that won’t go away or a single line item that continues to appear. In this instance you will need direction from a credit or financial specialist to point you in the right direction to have these items removed.

Call our credit expert group today for a free no hassle quote. Get your credit score back on track!

Why is Credit Karma Free? Learn What You're Missing Out On!

By Kevin Mercadante

Credit Karma is virtually unique among credit reporting services, because it really is a free service. You get your free credit score and your free credit report, and no credit card is ever required or even requested. And once you sign up for the service, you can return as often as you like to monitor your credit.

Is Credit Karma Free - Aren’t There Strings Attached?

This is something else about Credit Karma - there really are no strings attached. Most credit sites that offer “free9rdquo; anything, will usually offer you the service either for a very limited amount of time, or contingent upon you purchasing some other service they provide. But you will experience with none of that with Credit Karma.

The people behind Credit Karma believe that free access to your credit report and credit score are fundamental consumer rights.

And they believe that a credit report is too important to be restricted from the very consumers that it affects. Your credit report will be pulled virtually any time you apply for a job, a mortgage, an apartment, a car loan, a credit card, and even a new cell phone plan or a life insurance policy. Having access to your credit report at any time using the ability to make corrections anytime you need to.

In that spirit, Credit Karma provides you with everything related to your credit profile.

You Get a Free Credit Karma Credit Score

Credit Karma allows you to monitor your Credit Karma credit score on a continuous basis. That’s important because significant changes in your scores not only indicate derogatory credit information, they can also alert you of identity theft.

Since there are no fees - ever - you will feel safe monitoring your credit score as needed. Credit Karma provides Nightly Credit Report Monitoring, and even Email Alerts and Notifications in the event that there is a significant change in one of your scores.

They also highlight important items on your credit report and give you background information to help you understand exactly what you’re looking at. That’s important, since credit reports contain information that is usually well understood only by people who work in the industry. It’s a perfect system for someone who knows that credit is important, but doesn’t necessarily understand the technical details.

You Get Free Credit Karma Credit Reports

While many credit reporting services will provide your credit scores, Credit Karma also provides your credit report - also free. It’s all part of the package. You simply complete the registration, which takes only a couple of minutes, and you can get your credit report. And not just any credit report, but a TransUnion credit report, and they’re one of the Big Three credit reporting bureaus, along with Equifax and Experian.

Your credit report is updated on a weekly basis. You can pull it up any time you want, and also print a copy any time you need one. And if there is any information reported that requires your attention, Credit Karma, will provide suggested next steps for you to take.

You Get a Whole Bunch of Other Stuff From Credit Karma

If Credit Karma provided you with just your credit score and credit reports that would be plenty. But they also provide various tools that will help you to manage your credit more effectively.

Some of those tools include:

  • A Home Affordability Calculator
  • A Debt Repayment Calculator
  • A Simple Loan Calculator
  • An Amortization Calculator

They are also developing their own Credit Score Simulator. This will be an incredibly useful for that will allow you to see how taking certain steps with your credit will affect your credit score. This will be especially valuable in helping you to improve your credit score going forward.

This is a question that puzzles a lot of people. If most every other credit report service requires a subscription fee in the neighborhood of $20 - every month - then why is Credit Karma free? After all, they must have bills to pay, like everyone else, right?

Credit Karma is free because they use an advertising model to fund their operation. Third parties, in the credit industry, advertise on the site, and that provides the revenue that keeps Credit Karma running.

Free services, especially high quality ones like Credit Karma, draw a lot of people to the site. Whenever you go to the site and pull your credit report or credit score, Credit Karma will show personalized offers from advertisers, which are based on your credit profile. You’re free to take advantage of any third party offers you like - or not. But the advertisers are why Credit Karma can offer you so much access and information absolutely free.

Check out Credit Karma, and sign up for the opportunity they provide to monitor and improve your credit. Never before in the credit universe has so much been offered to so many at so little cost - like free!

Disclaimer: We work hard to offer you valuable and reliable information about all of the products and services we review. In order to provide you with this free service, we use links on our site that provide us with commissions for referring you to the seller#39;s site. We guarantee that this does not influence the material we present, but may influence the positioning on our site, and only supports our efforts to offer you the best and most relevant information possible.

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Credit Sesame Review #8211; Why I Made the Switch From Credit Karma

Why are credit karma scores higher

Read Time: 4 minutes

What is Credit Sesame?

Sure, they are a credit monitoring service, like Credit Karma and many others, but that#8217;s not all.

They offer more than the other credit monitoring services I#8217;ve seen, while still keeping it free.

What do they offer, you ask? A free credit score, free credit monitoring and free identity theft protection.

Free identity theft protection? That#8217;s right! And they actually offer even more than that.

Let me give you a quick breakdown, then I#8217;ll let you go try it out. After all, it is free#8230;

You may remember my review on Credit Karma. You may also wonder why I#8217;m reviewing both of these companies, if they are so similar. I#8217;ll tell you why#8230;

I found Credit Karma first. I signed up and we fell in love I liked the service.

A few months later, I found Credit Sesame. It was free, like Credit Karma, so I decided to try it out.

At first, it seemed to be about the same, other than free ID theft protection Credit Sesame offers, but a few months into it, I decided that I preferred Credit Sesame. Here#8217;s why#8230;

There was a fraudulent charge on my account. I#8217;m still not sure exactly how my information was leaked, but it was and someone, who apparently really loves kitchen appliances, was using my credit card information.

How did I figure all of this out? You guessed it#8230;Credit Sesame. They literally notified me the same day that the first fraudulent purchase was made.

You may be thinking #8220;I didn#8217;t really think credit monitoring services knew when fraudulent purchases are made#8221; and to be honest they don#8217;t, but Credit Sesame did notify me of a major balance change, which is what caught my attention and they notified me the same day it happened. My credit card company notified me a little later that day#8230;

So, what about Credit Karma? They notified too#8230;3 days later! If I would have been counting on them to save me from this criminal chef, I may still be paying off those kitchen appliances.

Enough about me, here#8217;s what Credit Sesame can do for you#8230;

Credit Sesame#8217;s Services and How They Make Money

The credit updates are really nice, but they do more than that. Let me explain their services and how they make their money#8230;

  • Free monthly credit score. Each month, you will get an email to review your credit scorecard. The scorecard will include your updated credit score with an explanation of everything that has changed. You#8217;ll also get free access to your Experian credit report.
  • Free 1-bureau credit monitoring. They will monitor your Experian credit report and score. You get alerts for changes on your account, like I did for the balance change. They will also send you alerts when offers come available that are better for your credit. This is one way they make money, through affiliate offers and sales. Which is also why the service itself is free.
  • Free Identity Theft Protection. You get $50,000 in identity theft insurance, plus fraud resolution assistance. Yes, that#8217;s all free; however, they do have a premium identity theft protection service, which does cost money, but we#8217;ll talk about that in a moment. Basically, if you don#8217;t have any ID theft protection right now, this is a great free way to get some.
  • Free credit and loan analysis. They will show you what#8217;s affecting your credit and what you can do to improve it. This is also where thier offers come in (in a good way). They will offer you cards and loans that save you money (of course, they earn money when you go through them). It#8217;s a win-win though, as long as you only choose cards and loans that are good for you.

If you didn#8217;t notice a trend, I#8217;m going to go ahead and just tell you: everything they offer is based off your Experian report. You can get a free report from all three bureaus (once per year) at annualcreditreport.com, but for month to month monitoring, one bureau is sufficient.

Anytime I see a free credit score service, my first question is always #8220;how do they make their money?#8221;. I showed you several ways above that they make money, but they also have #8220;premium#8221; services, which means #8220;paid#8221; services. They may be worth it for you. They are quite fairly priced#8230;

Credit Sesame Premium Services

Here are the premium services Credit Sesame has to offer:

This service adds:

  • Unlimited daily credit score updates (only available through Credit Sesame)
  • A fully downloadable monthly credit report
  • Credit dispute resolution via 24/7 live help

This service adds:

  • $1,000,000 in identity theft insurance
  • Full service identity restoration
  • Public records monitoring
  • Black market website monitoring
  • Social security number monitoring
  • Stolen/lost wallet protection via 24/7 live help

Platinum Protection (Everything)

This service adds:

  • Unlimited daily credit score updates
  • A fully downloadable monthly credit report
  • Credit dispute resolution via 24/7 live help
  • $1,000,000 in identity theft insurance
  • Full service identity restoration
  • Public records monitoring
  • Black market website monitoring
  • Social security number monitoring
  • Stolen/lost wallet protection via 24/7 live help

Why are credit karma scores higher

I hope you have a better understanding of everything Credit Sesame can do for you.

Once again, it#8217;s free, so you can always try it and make the decision yourself to keep it or not.

If the premium services are for you, you may want to try them too, but they may not be necessary for your needs. Start free and go from there.

I#8217;ve rated Credit Sesame below. I#8217;ve also given you the option to rate it, so let me know what you think!

I prefer Credit Sesame to any other free credit monitoring service. The identity theft protection is a nice addition and their timeliness makes them a little more reliable than other companies. You can leave your rating as well!

What is a credit score and why is it important?

What is a credit score, how is it calculated, and why it is (or is not) important?

Let us take a personal example in order to understand what is a credit score. We do not know each other. You have extra money that you are willing to lend in return of interest expectations. Apart from asking me details like my salary, my other debt obligations, my employment history; you will want to know have I taken loans from others before, and if yes then have I paid them back on the agreed terms and conditions (payment history).

In addition, you would want to know if I borrowed as much money as they were willing to give me, or my #8216;needs#8217; were less than what I could have borrowed (utilization).

In addition, you would like to know how long have I been borrowing from others (age of credit history), you might want to know in total how many times have I borrowed and how many of the loans are still active (total accounts), you might want to know how many loans did I take recently.

And finally, you would like to know how many loans did I ask for (credit inquiries) and if I have any public records that might be of relevance (civil litigation where I was asked to pay damages, or previous loans that went into collections).

This is exactly the way anyone lending money to anyone will think, and the banks are no different. Banks are professional money lenders and a credit report lists all of the facts that we listed above (saying you might want to know).

Factors affecting Credit Score

The lenders (banks) want to know the following about you #8211; credit card utilization, payment history, derogatory remarks, length of credit history, total accounts, and credit inquiries.

A credit report, like the name suggests is a report. That report is summarized into one number, called the credit score. The higher the credit score, the more creditworthy you are considered; and the more willing banks are to lend you larger amounts of money at a lower interest rate.

Naturally the next question is #8211; who is collecting all this information about me#8230; well the credit bureaus. There are multiple credit bureaus but the three most commonly used are Experian, Equifax, and Transunion.

Once upon a time, TransUnion had information on their website that hinted what a perfect credit score profile looks like:

  • A few (say, 3 or 4) revolving credit cards, each with very high lines of credit ($10,000+), and very low balances on only one (or maybe two) of them at a time.
  • At least one charge card (American Express, Diners Club, etc.).
  • All accounts at least six months old, and at least one more than three years old.
  • No derogatory remarks (public records).
  • Very few inquiries #8212; no more than one to three in a six-month period.
  • At least one #8220;installment#8221; account in good standing, i.e., a mortgage, auto loan, or student loan.

One other thing that you should keep in mind is what I call the #8216;recency effect#8216;. The more recent events have a bigger impact on the credit score, specially the negative ones. If you missed a payment two months back, the impact is far more devastating as compared to the situation if the payment was missed five years ago.

Missing payments will always have a bad effect on your credit score, so try to never miss them. The reason I mentioned the recency effect is #8211; be extra cautious about making timely payments if there is an upcoming big purchase, like buying a house.

How much can a good credit help you save #8211; let us say in the current market, people with excellent credit are getting mortgages at 4%, and people with average credit have to pay 5%. For a 30 year loan of $240,000; the difference between the interest payments over life of the loans is $51,327. Yes, just a 1% interest rate difference can save more than $50,000.

And what is interest rate (mortgage rate) dependent on? Primarily your credit history #8211; there are a couple of other things that determine the interest rate, but it is mainly your credit score that determines the interest rate the bank will charge you. Interest rate has two components #8211; one component is the part that the bank wants to make profit out of the loan business, the second component is that they charge you a little more if they think the chances of your repaying the loan on time are not as high.

Why are credit karma scores higherYou can get a free copy of your credit report from each of the credit bureaus once a year. In addition there are several other free resources to track your credit report/ score. Credit Karma is the best website whose sole purpose is to track credit reports. There are numerous credit cards that show FICO scores free of charge (one of mine does #8211; see the screenshot ). FICO score is analogous to the credit scores provided by the three bureaus #8211; actually all the three bureaus take FICO score into account.

Credit is a powerful tool, not only does it help you buy things now and pay for them in future, it also gives you rewards points and sometimes allows substantial tax savings on the interest paid. BUT remember, credit can backfire. If you are not extremely careful in using credit, you can land yourself into a lot of trouble#8230;.I repeat, a lot of trouble.

FICO credit score

Update 1/1/2016: My FICO score (see image above) was 778 on 10/21. And now it has dropped to 737 on 12/26/2015.

This drop has happened because I refinanced both my cars and also got a new credit card, so a lot of new accounts on my credit report.

Why are credit karma scores higher

FICO credit score 755 on 2/25/2016

I expect this drop in FICO score to be temporary and to come back to original levels in about 3 months. Remind me to share the new score in April 2016.

Update (2/25/2016): Now my FICO score is 755

OneMoreDime Special: Credit score is never looked at in isolation. It is always looked at together with the credit report. I personally know of an example where Creditkarma showed a credit score of more than 780 but this person was denied a credit card.