Thursday, August 8, 2013

Credit Karma: a Review

I'm no Dave Ramsey, but I will admit, I kinda like paying bills.  Now this "like", is akin to taking out the garbage or organizing the garage or gardening or perfectly folded laundry or house cleaning or meal planning.  I don't relish paying bills like reading a book on the back patio with a summer breeze on my face and a cool drink in my hand, but I do love the results:  a balanced spreadsheet and a solid but realistic financial budget.  I like the harmony that only comes from reconciled living within our means and still being simply, comfortably, and peacefully happy (if I'm honest, probably even happier than if we had unlimited funds).

Please don't get the wrong idea, we aren't the greatest with money ever:  
We over-spend sometimes and then end up eating red beans and rice (a recipe which isn't much of a punishment because my husband happens to love them).  We've had household emergencies that we hadn't planned for adequately.  Our home value has drastically decreased over the years.  We don't save enough for retirement or house projects or our kids colleges or for the dream vacation (not just the summer adventures that are actually nearly cheaper than being home).  Sometimes we have wants that in our minds turn into needs (like a fireplace in the living room or the perfect shoes in the sale section of Von Maur).  Overall, our debt is manage-ably moderate while keeping balance with enjoying a full life.  

Along with this "like" of paying bills on-time, I'm always drawn by our credit report.  It is the tangible score that is evidence that we are making sound financial choices.  I feel like it is our reward for living simply.  Until now, it has always been this mysterious number that we would get when we went to buy a new car at 1.9% financing.  It was sometimes higher or lower and we would nervously garner private guesses before the loan officer pulled out the report.

With great joy, I'm happy to announce, as of yesterday, this is no longer the case!!!

This new enlightenment started as we are attempting to do some eco-friendly upgrades on our house (I'm sure more details in a later blog).  That said, we just bought our new navy Prius (affectionately named Baloo Berry Manly-Man-Man) and money is tight.  I'm researching to see how feasible this endeavor really is. In the past, I would sign up for a free trial on a complicated financial website that I had to remember to promptly cancel or get my credit report from a company checking our finances.  I would diligently match up cards and adjust the numbers so that I could see what cards were real, what Victoria's Secret cards I didn't even know we had, and make sure that no one had assumed our identity.  I would cancel old cards (turns out to not only be unnecessary but almost hurtful on a credit report)

I did this, maybe once a year, for each of us.  Thanks to my neurosis, it would take all day and a lot of coffee.

This time, I found the FREE website:  creditkarma.  It is WONDERFUL.  The best financial over-view site ever (I've visited a lot of sites over the years).  You don't need to give a credit card number at all.  This is not a free trial.  It is actually free.  There is no limit of how many times you can check a year.  It quickly pulls a credit score and explains how it came to that number. One can see what accounts they have listed to make sure your identity is still your own.  It has a simulator to tell you how your score would be effected if you embarked on certain financial routes (both positive and negative).  There are loan calculators and loan offers (probably how creditkarma makes it's $) to match your financial situation.  It gives advice on what to do in the future to increase your score (some obvious, but many others surprised me).  It has bright colors and is very user friendly.  It even tracks your progress if you sign on once a month (I'm going to just sign on for each of us, on the 5th of every month -- bill paying day).

The icing:  it allows the option to match your online accounts to your credit report so that you are able to keep a more accurate assessment of the situation (just like I would do with pen and paper once a year).  It has bank level security and can even email updates on the accounts that are linked, a setting that can be easily changed.

I can't seem to pull myself away from the site, it makes me so happy that I'm almost giddy.  So, while preparing for the seasonal transition and trying to reconcile the accidental over-spending in the name of "enjoying summer-time".  As you are creating the school year budget, I highly recommend a glimpse into this site.  The site is ridiculously user friendly, but a couple of tips:

  • Separate accounts are needed (with separate email addresses) for both you and your spouse
  • Be ready to answer some fairly easy multiple choice questions to prove your identity
  • The site still works beautifully (and even more streamlined) on an ipad
  • Remember to check out the credit score simulator.  It is my favorite part of the site
and don't forget to pour some extra coffee and "enjoy" the power of being in control of your credit report card.  Maybe, along with your kids, you can work to make honor-roll this year ;0)

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