Free Credit Report Cards From Credit Karma

One of my favorite financial websites is Credit Karma. I love the ability to get and track my credit score for free. Now they are expanding their services to provide you with credit report information. The new feature is called Credit Report Cards, and it is also free. I checked it out today and I thought it was a great feature.

How To Get Your Free Credit Report Card

If you’re not a Credit Karma member yet, you’ll have to sign up. Otherwise, just log in to your account. After you logged in, you’ll see a screen that prompts you to update your score. Go ahead and do it now. After your Credit Karma score is updated, click on the Credit Report Card link. Credit Karma will ask you to validate your identity by answering a few questions. If you can answer the questions correctly, Credit Karma will grant you access to your Credit Report Card.

Credit Report Card

The credit report card has 7 sections as follow. Each section comes with a graph and a link that gives you more information — e.g., more graphs and details. Overall, this is a very detailed report that allows you to drill down and get a firm grasp on how to improve your credit score.

Credit Report Card

Open Credit Card Utilization

“Credit card utilization is defined as the total credit card debt you have divided by the total available credit on your credit cards. High credit card utilization can be a warning sign of credit risk.”

I am doing well here, only utilizing only 2% of my total limit for my credit cards.

Percent of On-Time Payments

“On-time payments are an important component of your credit score. Using your credit responsibly and paying bills on time are great ways to maintain a high credit rating.”

I am doing well here also with 100% on-time payments.

Average Age of Open Credit Lines

“Credit history is a significant component of your credit score. As such, the average age of your credit lines can be a strong indication of your credit history. Care should be used in keeping old accounts open, active, and in good standing.”

Although my oldest credit line is 12 years 6 months old, the overall average age is only 5 years and 11 months with the newest being my car loan. If I don’t open any new credit line and let the average age grows to 6+ years, my credit score should improve as a result.

Total Accounts

“Both the total number of credit accounts you have and the mix of credit you have will affect your credit score. A healthy mix of revolving credit cards, charge cards, installment loans and mortgages will also impact your credit score.”

Personally, I think I have too many credit cards and loans. Apparently, the system doesn’t agree with me and think 19 credit accounts are not enough (6 open accounts and 13 closed). My preference is to keep things simple, so I am not going to run out and apply for a whole bunch of credit cards just to score better in this area. I’ll just live with a “D”.

Hard Credit Inquiries

“Inquiries for credit, also known as hard inquiries, are placed on your credit report whenever you apply for credit. These results are the inquiries for credit over the last 2 years. It is important to note that soft inquiries, like the type used by Credit Karma, do not impact your credit score and are not counted in this metric.”

I got a C for 4 hard pulls. At least one is from the car purchase. Another is probably from taking out a life insurance policy last year. I am not sure where the other two are from. With no planned activities in the near future, this factor should also improve going forward.

Total Debt

“Tracking your total debt is a good way to gauge your financial health. When lenders evaluate your credit, this is often a key metric they review.”

This is a very cool section, when you click on the “more info” link, you’ll get a pie chart with a break down of your debt. It’s important to note that there is not a strong correlation between total debt and credit score — meaning, more debt doesn’t mean better or worse credit score, or vise versa.

debt pie chart

Debt to Income Ratio

“Your Debt to Income (DTI) ratio compares the difference between your monthly income and the monthly amount you spend to maintain your debt. It is often a metric used when evaluating loan applications. In general, the lower the DTI, the better the credit risk.”

You’ll have to enter your own monthly pre-tax household income to get a customized reporting of your DTI. I entered $10,000 for demonstration purpose only. Although, DTI is not a factor in your credit score calculation, a lower DTI reflects a stronger financial health because less of your income goes toward debt payment.

My recommendation is to give it a try and look carefully over the grade details tabs and more info pages. They will help you better understand your credit score and how to improve it.

About the Author

By , on Jun 10, 2009
Pinyo
Pinyo is the owner of Moolanomy Personal Finance. He is a licensed Realtor specializing in residential homes in the Northern Virginia area. Over the past 20 years, Pinyo have enjoyed a diverse career as an investor, entrepreneur, business executive, educator, and financial literacy author.

Credit Score Ratings Chart

Credit Score Description
750+ Excellent
700 - 750 Good
640 - 700 Average
580 - 640 Poor
below 580 Bad
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Leave Your Comment (7 Comments)

  1. Pinyo says:

    T.H. – Yes, I pay off on time every month, but $897 was the balance not yet due.

  2. T.H. says:

    Hi, I have a question regarding the “Total Debt” section of Credit Karma.

    Is the “$897″ you have as credit card debt considered balances that you have failed to pay on time (thus called a debt)?

    Or is the $897 just simply a balance on your credit card right now that you haven’t paid yet because it’s NOT DUE YET. (but you will pay off when the statement arrives in the mail by the deadline)

    I find it strange that you have a 100% for making on-time payments yet you have a credit card debt of $897 which you apparently did not pay off.

    Am I understanding this correctly?

  3. Saj says:

    That’s terrific; I have not come across a site that offers this service for free. Thanks!

  4. Lynn says:

    I agree with Harrison that I am not sure it is correct. I got my FICO score back in Oct and it was 800 and Credit Karma said it was 720. Now its 731 and my FICO score is 765 (dropped 35 points in 6 months due to new credit inquiries and higher balances etc)

    I love the new report feature though. Do you know how it figures the open credit card utilization? I got a big fat F! It says I only have a credit card limit of 2300 when I know I have at least 50K in limits! And even though I pay off my CC every month it says I have 10000 in CC debt (which was true after the last statements since I had some large charges and went on vacation). So it is telling me I am using 100+% of my credit. One card is an AMEX but it still has a limit of 20K. What is up with that? Anyone know?

  5. lrgche says:

    I love the new Report, thanks for the review, completed mine this morning.

    I agree about the Total accounts number. 15 for me, 5 open, 10 closed, but I’m looking to decrease accounts not increase.

    Ultimately I’m getting out of debt with the intent to never borrow again so my score should eventually go down.

  6. Harrison says:

    I gave this Credit Karma a try before. I get a 700+ in credit score and I quite shock to see this number as I don’t think that I have such a high score due to the credit card fraud incident that happened before.

    I suspect that the score is not accurate. I can’t complain much here as it is a free service.

  7. imDavidLee says:

    i went to bank negara to check all linked bank account with credit card account and found that i have zero outstanding balance..thats great news for me..haha

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