In 2003, Congress passed the Fair and Accurate Transactions Act which allows citizens to gain access to their credit reports for free one time every 12 months. All three major reporting agencies Equifax, Experian and TransUnion are required to participate, but when you request your free credit report from any of these expect that they will try to sell you your credit score along with your free report. However, TransUnion offers you the chance to see your credit score for free through their unique website Credit Karma so why pay for the cow when you can get the mik for free.
Credit Karma is absolutely free and requires no credit card and does not try to sell you anything directly. Rather, the website makes its money from offering you personalized debt management recommendations from its sponsors that the site matches to your eligibilty. For example, Credit Karma sponsors are matched to you for potential savings for your banking needs, credit card and auto insurance needs.
Credit Karma does not send out annoying e-mails or subscribe you to newsletters; they respect your privacy. In fact, it is one of the least intrusive sites for a personal finance website anywhere around.
In 2011, Credit Karma rolled out two new credit scores included in their free service, VantageScore and Auto Insurance Score, so you can now access three of your credit scores for free including your TransRisk Score, TransUnion’s version of the FICO Score.
Not only does Credit Karma let you track your credit score over time, but it offers several useful tools for the subscriber to better understand and see his individual credit history. The site is very educational by explaining various aspects of how your credit score is computed and what weighs into the formula and how it could impact your overall number.
One important feature is the Credit Simulator which predicts what might happen to your credit scores if you open a new credit card or close a credit card, increase or decrease your outstanding debt or pay off all your credit card or other balances. The Credit Report Card feature lets you see how you stack up against other users or against the metrics in categories such as Open Credit Card Utilization, Percent of On-Time Payments, Hard Credit Inquiries, Average Age of Open Credit Lines and your Total Accounts.
Credit Karma also offers calculators for basic personal finance like home affordability and debt repayment as well as for simple loans and amortization under the Advice & Learning tab.
You can check your credit scores for free at Credit Karma by just signing up and then going back and rechecking it for free any time you want. This is a great way to monitor your credit score at no expense to you so you can use the savings to pay down debt.