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Seven Small But Important Things To Observe In Karma Credit Score | karma credit score

Your Credit Karma has never changed since the credit agencies haven't reported your info, your shifts were not significant enough, or even the bad knock on your report has wiped the positive changes from your file. When you're seeking a loan for an automobile, a payday loan or any kind of loan, you understand it's very validating when you make such a positive change in your financial status and your score…right? Now consider if this makes sense to you. In my opinion, no…it doesn't make sense to anyone at all.

Consider a couple of examples. Let's assume that you've been diligent with your payments are reported accurately. This is a good thing because this will have a significantly lower score. However, if you were delinquent on at least one account, it would have a significantly higher credit score. This is due to the fact that the accounts were closed, but the transaction records were not wiped from your record as “discharged”, so they remain on your report.

It is also important to realize that credit scores are not just based on the total available balances. If you have a large balance that is frequently used by the company you are buying the product from, they may report this as “high utilization”, even though it is not actually being used. They don't like to include these as “open balances” so they use a numerical standard called credit utilization ratio (CUV).

Credit utilization is a mathematical ratio that represents how much available credit a consumer has versus how many credit limits they have established. For example, let's say that I want to purchase a new video game. My goal is to make sure I have at least $500 available credit to make the purchase. Therefore, my score will be calculated by taking my current available credit and dividing it by my total credit limits. My score will then be calculated as (usage / total available credit).

Because of my negative history, all of the negative information that was on my report about my debts is reported positively as bureaus report these items as “paid off”. As you can see, this positive change in my credit score has allowed me to receive a significant increase in my credit score. This positive change has allowed me to purchase a new video game.

There is another way to increase your Karma. You can increase your total number of credit inquiries while keeping your debt to income ratio at an acceptable level. The way that you increase your total number of credit inquiries is by maintaining your open accounts. Each time that you apply for a credit card, it will show up on your report as an inquiry. Each time that you pay off this account, it will also be reported positively to the credit reporting bureaus.

By maintaining a good payment history with these open accounts, the scoring bureaus believe that I have a low risk of defaulting on a loan if I were to take out one. Therefore, if I were to do this, it would cause my credit report to reflect an increase in payment history. In addition to my payment history with these accounts, I have also maintained my debt to income ratio at a relatively high level. This shows that I am able to manage my finances effectively. Therefore, the credit bureau sees me as someone who is capable of paying off my debts without problems.

You can view your Karma information in three credit reports each year for free. It is important to review your score at least once a year. As you know, your main credit report contains all of the information that is reported to the bureaus by creditors, like your employer or landlords. However, the other two credit reports can be used to monitor your financial progress and to assist you with finding ways to improve your Karma scores.


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