Credit Karma is a well-known and free credit and financial management company which offers credit scores, reports, and tracking services. It also contains information on how to enhance your credit status and several tips that are useful in the course of credit scoring. If you are like the majority who use credit monitoring services such as Credit Karma, frequently you may have wondered whether checking your credit report or score will affect your credit rating in a negative way. The short answer to this question is negative, and the following explanation is provided for that option.
How Credit Karma Works
Credit Karma offers the opportunity to check credit scores and credit reports from TransUnion and Equifax, two out of the three main credit bureaus. This does not pull a hard credit check on your credit report to obtain this information. A soft credit check is applied, therefore it does not influence your credit rating in any way. Hard inquiries which are normally done when one applies for credit reduces the scores for some time.
During registration, users submit some of their personal data such as name, address, Social Security number, etc. to check their identity. Upon validation, Credit Karma can pull your credit data at regular intervals without having to make further hard pulls. What this means is that you can always log in and check your scores without any risk of cheating.
Before proceeding further, let us discern between a soft check and a hard inquiry. Soft checks sometimes occur without your permission, never appear to lenders, and do not impact your scores. Hard inquiries need permission, are shown to lenders and can slightly impact your scores.
Why More Often is Good for Checking Scores
The frequent monitoring of your scores is important because it enables you to identify such activities, mistakes, or unlawful actions at an early stage. This also helps to enforce good financial habits because you get to see how your credit is changing. Detecting unfavorable trends at an early stage gives you an opportunity to fix mistakes and increase your credit score in anticipation of a mortgage, auto loan or any other credit product.
The general recommendation for how often one should check a credit score is approximately three to six months. It is not necessary to check it every single day as it may lead to obsessiveness. Credit scores can only be affected by either additions or changes to the credit report which is not done on a daily basis. This means that while it might be a good idea to check your credit score every week or every month, it is equally important not to overdo it.
Is It Possible To Close Your Credit Karma Account And Have Your Credit Scores Suffer?
You should know that closing your Credit Karma account does not have any impact on your credit scores in any way. This is because Credit Karma does not supply or manipulate the statistics available in the credit reports. It only reports the information it receives from Transunion and Equifax. Your payment histories, debt levels, credit utilization etc. that define your Credit Karma scores remain unaffected by whether your Credit Karma account is open or closed.
Nevertheless, when you close your Credit Karma account, you will not be able to monitor your credit reports and scores as often, if at all, elsewhere. You can also find it harder to spot mistakes, the first indications of identity theft, or drops in your scores most quickly. However, the act of closing the account does not affect your credit scores in a direct way.
The only possible drawback is if closing your Credit Karma account results in the platform performing a hard credit check. That it does not happen, there isn’t much evidence, and where there is evidence, there are very few strict assurances. The best way when closing any financial account is to look if it says that no hard credit check will be done when the account is closed. This rules out any shocks that are detrimental to your credit score.
Is Credit Karma Harmful to Your Credit in Any Way?
There are a few highly unlikely ways using Credit Karma could hypothetically affect your credit scores:There are a few highly unlikely ways using Credit Karma could hypothetically affect your credit scores:
Hypothetically, if hackers got hold of your account, they are capable of using personal information to perpetrate identity theft and cause a lot of harm to your credit status. Fortunately, this is not the case with Credit Karma and their security measures. If Credit Karma obtains authorization to perform hard inquiries to offer score updates, then your score will definitely be affected. Nonetheless, Credit Karma explicitly only performs soft inquiries. If lenders could monitor your Credit Karma activity, then constant checking is an indication of credit risk. However, soft pull inquiries are not observable to the lenders. If you over-check reports via any kind of platform, it could make it possible to develop an unhealthy obsession with scores. However, moderation is the name of the game whether Credit Karma is incorporated or not. So long as proper usage and security measures are observed, Credit Karma is a tool that does not harm your credit profile in any way whatsoever. An exception is if their terms of service without prior notice shift to permit hard inquiries for simple changes – a highly improbable occurrence.
The Takeaway Credit Karma safely offers as many credit scores and reports as you want during the decision-making process without negatively influencing those scores. As long as proper credit management is employed, using Credit Karma is not only safe but can even be beneficial for credit health since it provides more opportunities for monitoring and planning.
