In today’s world, your credit score is important for everything from obtaining a loan to securing the lowest possible interest rate on a mortgage. Your credit score can even have a bearing on your ability to land a job. While a number of different tools exist to take control of your credit and improve your score, Credit Karma has emerged as one of the best personal finance apps around. Credit Karma works with TransUnion and Equifax to provide people with access to their scores and guidance on how to improve them. What makes this app stand out from many other services is the fact that it is free. You do not even have to provide credit card information to begin benefiting from Credit Karma’s tools, since the company is paid through targeted advertising from vetted organizations.
Today, tens of millions of people rely on Credit Karma to raise their credit scores to an acceptable range. The company offers an impressive array of tools, and many may not even be aware of all the benefits that come with a service that continues to be free. Following are some tips for how to make the most of your Credit Karma account.
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Search for unclaimed payouts.
If a former employer or other business owes you money but does not have your contact information, it often hands it over to state governments. Governments hold on to the money linked to your name, and it can be reclaimed through the use of a simple form. Today, more than $40 billion of unclaimed funds are entrusted to state governments, so it is worthwhile to conduct a quick search and see if any of it can be claimed. Using the Credit Karma tool, individuals can perform searches for every state they have lived in, since the money would have been submitted to the government at that time. While the process for reclaiming money varies by state, Credit Karma helps people find the resources they need to get the ball rolling.
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Use the mortgage refinance calculator.
When interest rates begin to fall, homeowners often begin to wonder whether they should refinance, particularly if they locked into rates that are not great or if they have a variable rate. Answering this question can be difficult since the refinancing process can involve a lot of expenses that might outweigh the overall benefit. However, Credit Karma has a great mortgage refinance calculator that can help you play with the numbers and figure out what makes sense in your unique situation. The calculator only asks for some basic information, such as the loan term and length of time that you plan to live in your home. In the event that you decide to refinance, Credit Karma has additional resources you can use to obtain the best mortgage rate through its partners. The service can help to streamline the entire process.
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Dispute falsely reported information directly.
Credit Karma encourages you to periodically look through your TransUnion credit report, which shows all of the accounts that factor into calculating your credit score. Occasionally, erroneous information appears on these reports that can unintentionally lower your credit score. Through Credit Karma, you can use the Direct Dispute tool by clicking on a button displayed below each account on the report. The tool walks you through the steps involved in making and submitting a request. Then, TransUnion reviews the requests and makes the appropriate changes. While filing a dispute will not guarantee any changes, Credit Karma will display the updated information as soon as it is fixed so that you can verify that the changes were accepted.
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Estimate the effects of different actions on your credit score.
One of the most useful tools that Credit Karma provides is a simulator that estimates how much your credit score will change given a particular action. The score starts with the existing TransUnion credit report and uses VantageScore 3.0 credit scoring criteria. This tool is particularly useful if you want to open a new credit card or secure a new loan. You may also choose to use the tool as motivation to pay off your debt because you can see how much your score will increase after certain debts are paid. Keep in mind that the simulator is only an educational tool, and so any changes are estimated outcomes. However, it can give users a good idea of what to expect.
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File your state and federal taxes for free.
Many people do not realize that they can file their taxes for free using Credit Karma. The service involves no hidden fees or upsells, unlike many of the other free products available for filing. In addition, the forms come complete with various tips and tricks that can help people to maximize the money they get back or minimize the amount they owe. Moreover, Credit Karma has hired a whole team of individuals who are available around the clock to field questions and offer guidance. The one caveat is that the service supports only the more common forms and schedules, although most people who do not already have an accountant will find that they are covered.