If you’ve been following Money Monday for the past month and taking in some of our tips and best practices with credit, you are now just one week away from graduating from our summer credit shape up clinic. As you venture forward in your financial life — hopefully using some of the strategies we’ve covered in our column — I want to share with you some tools that will help you along the path of strengthening your credit and improving your credit score. Below are three of my favorite online credit resources.
Credit Karma gives you a TransRisk score that ranges from 300 to 850 and is based on your Transunion credit report. You also can view your Vantage score and Auto Insurance score (that’s right – insurers do base the rates they charge on your credit worthiness). The TransRisk and Vantage scores you receive from Credit Karma are not official FICO scores, but rather are educational credit scores (or FAKO scores as I’ve previously called them). I’m a fan of free FAKO scores as they can provide you with an understanding of your general credit worthiness. Just remember that these scores are not used by lenders to make decisions loan applications.
Credit Karma is also a great educational tool. It gives you a credit report card that assigns you an overall grade of credit worthiness and then breaks down your profile into categories for credit utilization, on-time payments, average age of accounts, total accounts, credit inquires, and derogatory marks – all of which are factors that influence your score. Since Credit Karma actively monitors your Transunion credit profile, this tool is a great way to watch for suspicious activity, as well as survey how the various aspects of your credit (account balances, scores, utilization, account age, etc.) have changed over time.
This is a must have tool for me. I check my report card here at least twice a month.
I’m convinced that you could earn a Master’s degree in personal finance just by following the conversations over on myFICO Forums. This online community has discussion boards that cover myriad topics relating to debt and credit. Although there are boards for mortgages, auto loans, student loans, bankruptcy, and rebuilding your credit to name a few, my favorite is the credit cards board.
The credit card board is by far the most active with over 400K posts to date, and the information found therein can be useful for anyone just getting started with credit, rebuilding credit, or already a credit pro looking to add another prime card to his/her portfolio. I followed advice from the myFICO Forums for years and attribute much of my success in obtaining prime credit cards, such as the American Express Blue Cash Preferred and several signature VISAs, to knowledge gained from this community. Invaluable areas within the credit card board are backdoor numbers and credit scoring 101.
Choices can often be overwhelming, especially when there are thousands of them. Whether you have prime or crap credit, there are dozens, if not hundreds of credit products out there for your needs (admittedly, some are better than others). So how do you make the right choice? Let Nerd Wallet do it for you.
Nerd Wallet is a free tool to find you the best credit card based on your spending habits, whether you are trying to maximize rewards or minimize your interest rates. You get started by telling Nerd Wallet what kind of card you’re looking for, how you plan to use it, and what you are most interested in. The system compares over 1700 cards simultaneously and gives you a comprehensive list of results. You can then filter those hits using a variety of criteria like your FICO range, average spending in specified categories, maximum annual fee, and so on. Once you find a few cards of interest, you can look at them more closely and see Nerd Wallet’s summary for the card, how the card ranks against its competition, and the card’s special promotions and APRs.
When debating which card gives me the best rewards based on my spending habits, this is where I go. It is also where I recommend anyone visits when they are seeking new credit, regardless of past history.
The resources I’ve mentioned should help continue your education in credit while also providing you with a means of tracking your progress and obtaining the right loan products for your situation. By no means is this list all-inclusive, but my hope is that these tools help you put your best foot forward as work toward financial freedom. What tools and resources do you recommend?
Just one of ‘fatboyfavs’