Review of Free Credit Score Analysis Tool: Credit Karma

Think Twice Before You Cut Up Your Old Credit Cards

A Truly Free Credit Score and Helpful Analysis of the Factors Affecting Your Credit

cut cardUnlike many of the ‘free’ credit score sites out there that say they are free, Credit Karma truly is free.

Credit Karma provides secure access to your credit score with many features that help you analyze how your debt and payment has affected your overall score.

Rating: ★★★☆☆

Not only does this tool provide you with your credit score, it shows you:

  • A Report Card of the factors that affect your score and where you fall
  • Your score and how it shifts over time with charts and graphs
  • A snapshot of where your score is compared to the national average
  • A comparison of your credit to other members of the Credit Karma community
  • A credit simulator that suggests how changes will impact your credit score (My score went up 8 points if I added a new credit card with a 3500 limit, crazy!)
  • They also have helpful debt calculators such as mortgage affordability, debt payoff calculators, etc

credit-karma-logoWhat I found most interesting was the section called “Report Card”. It ranks certain criteria that is used to determine your credit score from A through F. It was very helpful for me, because I realized something critical in the way I have been managing credit cards and how I will manage them moving forward.

I have to admit, I was one of the typical college students that fell prey to the open 3 or 4 credit cards during the freshman orientation. I didn’t spend a lot on these cards, but when I wised up, I took the advice of someone that I should close any cards that I’m not using as that negatively affects my credit. So, I’ve been doing that over the years. When I don’t want a card any more, I close it. WRONG!

It turns out I have a “D” score on my credit score (which is overall “good” right now at 729) for Average Age of Open Credit Lines as well as Total Accounts. I’m very intrigued by the fact that doing something as simple as keeping some of my unused credit cards open will improve my credit score. I had NO idea. And as such I always close old cards that I’m no longer using.

Another thing I found interesting was that if you opened and did a balance transfer, with the simulator your score went down. However, if you just open a new credit card, your score goes up. I suppose this is because it indicates that you can handle more debt.

I highly suggest trying this tool out, if you are willing to overlook the offers and sales pitches on the page, it is a great way to actively monitor and improve your credit score.

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