Credit.com Offers a Different Perspective from CreditKarma.com

Credit.com offers an additional resource that can complement your use of CreditKarma.com (read my review) or other credit report services.

Though Credit.com doesn’t offer as much detail or tools as CreditKarma.com, it did give me a higher overall score, which I found interesting. It ranked me as A to A- for all categories, where as on CreditKarma.com I had D in a few different categories such as length of open debt. From what I’ve read, the discrepancy is based on the recency of the data as well as which credit agency it is using to determine your score, and supposedly CreditKarma doesn’t go back in date as far as Credit.com does.  This factor alone is enough to take a closer look at Credit.com for accuracy.

Rating: 3.5 out of 5 stars

Credit.com determines your score to be based on the following categories:

• Payment History (35%) Simply put - you have to pay your bills on time.
• Debt Useage (35%) Keeping low balances and having higher limits for your debt increases this value.
• Credit Age (15%) If you have accounts that have been opened for a while, this helps this score. (CreditKarma and Credit.com have very different perspectives on this)
• Account Mix (10%) Types of debt that you have (mortgage, credit cards, other loans)
• Inquiries (10%) Its a good idea not to have too many inquiries to your score (I’ve read that if you shop around, say for a mortgage, and have multiple pulls of your credit in a 2 week period, this doesn’t affect your score as much, but don’t quote me on this)

Keep in mind that for the full detail on actual accounts that are included on your credit report you’ll have to purchase one or get your free annual report. Under the FACT Act you are required to have access to at least 1 free credit report a year, and you can get that at http://www.annualcreditreport.com. This looks at the three major credit bureaus, Equifax, TransUnion and Experian. They will also report on court records for lawsuits, judgments and bankruptcy filings.

You can also possibly obtain your free credit report from your local credit union. The one I work at in Boulder provides a review of your credit report free to its members.

Its always a good idea to check your credit report, if at minimum to monitor and ensure that you don’t have any fraudulent activity. Also though, to learn how to improve it as I am.

Here’s a nice comparison: http://www.consumerismcommentary.com/2009/09/30/credit-report-cards-credit-com-vs-credit-karma/

What do you use to monitor your credit score and credit report? Do you use a credit monitoring or  identity theft service?

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• November 23, 2009 -- 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

Unlike 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: 3 out of 5 stars

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

What 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.

Related Posts

• November 24, 2009 -- Review of Free Credit Score Analysis Tool: Credit.com