Wednesday, June 26, 2013

Getting my Credit[Karma] Back on Track



I've always prided myself on my high credit score. Don't get me wrong, it was never through the roof amazing, but I did make some very beneficial decisions at an early age.

When I was 18, many of my friends were scared of credit cards - scared of having money that wasn't really theirs, and getting in debt. Rightly so, we should never want to be in debt. The year I turned 18, was the year that the economy really started to stagnate. Friends were watching their parents struggle because of debt, thus they definitely did not want a credit card.

I was the opposite. Of course, I was weary of debt. I knew that if I someday wanted to buy a house, I was going to need to start building my credit ASAP. I couldn't be happier with the decision I made. I got my first cc from my bank when I was 19. A few months later I ran into some rental problems where I had $900 of my hard earned money tied up into a place I didn't end up renting. The cc helped me to move to Ohio and then, once that money was available, I paid it off. A few months later my house was on fire. I was so grateful that I had made that decision for emergencies. 

Since 2007, my life has been a whirlwind. I'm not proud of some of the financial decisions I have made. Overall, I've been self-sustaining. I have 3 cc's, an auto loan with no cosigner, over $25k in student loans and a couple of department store cc's. That's a lot of credit, and a lot of debt. 

Since we began planning the wedding, lowering my debt has been my #1 savings goal. Wait, savings? Remember when I said that I understand credit? Here's another example. Instead of putting all of my money into savings for my wedding, I've decided the best plan of action is to pay off my cc's. By doing this, I open up the money I can borrow from those accounts and build my score back up in case I need a loan.

I didn't realize how low my score had become because of the small amount of credit I had open. A lot of my cards are functioning over 50%, and a great credit score has 30% or less. Yesterday my coworker introduced me to Credit Karma.




I am seriously in love with this website. Not only can I see that my score is low because I am using a higher percentage of my cards, but it also generates scenarios that affect my credit score. There's over a dozen including "if I pay off x amount," "if I open a new card," or "If I let a card go into collections," etc.

Don't be scared that it will be another "credit hit." Credit Karma uses a soft hit, so it does not negatively affect your credit score, as a credit check does. Previously, you get one free credit check a year. This website allows near constant monitoring.




Why do you provide free credit scores?

Credit Karma believes consumers have a right to know this information with no charge or without the bait and switch of 30 days free followed by enrollment products with confusing opt outs. We subsidize our cost of pulling the credit scores by selling advertising on the site.

[It is important to note that your score doesn't change immediately after making a payment.]

Perhaps one of the things I like the most? It challenges me to pay down my credit. I've been trying to make it a challenge for awhile, but seeing it like this, makes it even better.

Happy, happy Wednesday, by the way. Congratulations to all of the couples who can now legally marry and receive benefits. I could not be happier, and cannot wait for the wedding invitations!!

P.s. Read this awesomely informative article from Freedom to Marry: After DOMA





P.p.s. Linking up with my favorite Wild Card

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