There are a number of websites that claim to provide the same services for free. However, by the time you sift through the scammers and the less than useful sites, you are left with only one seemingly worthy contender. Credit Karma is fully legit and is accredited with an A+ rating by TRUSTe and the Better Business Bureau (BBB).

This puts to bed any doubts about it being a scam and leaves us with only one question: does it offer the whole package?

Registering for Free Account

In case you still carry unfounded doubts about its legitimacy, the fact that the website does not store your credit card information should put your mind at ease.

On registration, the only sensitive information you may have to provide is your identification details as it uses this to pull your records from various databases.

Other than that, the usual monitoring of the login behavior and a few other non-essential information are the only things the site will remember.

Signing up is quick and easy. Furthermore, your details are protected by SSL technology. It also does not collect information about your location or even Social Security Number – with the exception of the last four – as an added measure of security.

Once you sign up, you are able to access all the services for free.

Credit rating sites often give you a 7-day trial period before imposing their monthly fee, so on this score Credit Karma looks to bring a better deal to the table. Thanks to this, you do not need a credit card to enjoy their services.

How Accurate Is Their Reporting?

It is natural to think that the services offered by a free credit rating site would be mediocre at best. However, Credit Karma once again proves to be worthy as it gathers its information from two of the biggest, most trusted rating bureaus. As such, the accuracy of your credit report should not be in question seeing that Credit Karma retains world-class standards despite being completely free.

Additionally, you will be able to access information on a weekly basis as the site regularly updates your credit score every week. This may be a crucial feature if you are looking to strictly monitor your credit score, although some may find it less than useful given that not a lot of credit activity goes on in a week. They also have a program that allows you to project how your current decisions will impact on your future credit score.

Credit Karma Score a Respected Type of Credit Score?

Granted your credit scores will differ from FICO scores, Credit Karma uses TransUnion which is still able to give you a good visualization of your current standing and determine your worthiness. Lenders prefer to use FICO scores when determining your credit worthiness so at some point, FICO becomes a necessity. Furthermore, the use of a different source of credit data results in credit scores that are dissimilar from the Experian Vantage credit scores you might be used to.

With the data obtained from TransUnion and Equifax credit data, Credit Karma is able to provide Vantage Credit Score 3.0. Similarly, the credit reports are also generated from the two databases. The credit score, although accurate, is not a FICO credit score.

Can I Provide My Credit Karma Report to Credit Repair Companies?

It may not be the preferred money lenders’ choice FICO but Credit Karma still holds its own as a good credit rating website to help make an informed decision on whether or not you need credit repair services. Their website is relatively easy to use and it comes with an assortment of useful services and information, all of which you can access for free. The frequent updating of the reports and collection of online tools gives you the power to monitor your credit score and plan your finances accordingly.

If you’ve ever made a late payment, you’re not alone. According to the National Foundation for Credit Counseling, roughly 1 in 4 adults don’t always pay their bills on time.

Many Americans struggle with making payments on time in their 20s and 30s, and sometimes this habit can extend far past those age groups. Having an overdue credit account can be damaging to your credit score and to your wallet.

Late Fees

Late payments often results in late fees. Additionally, if you’re near or at your credit limit sometimes a late fee can result in causing your credit account to go over its limit. This can often be more damaging than a late fee to an overdue credit account. Making your payments on time will help you avoid going over your credit limit and also keep more money in your pockets. Late fees are incredibly expensive, costing anywhere from $25 to even a percentage of the balance on your overdue credit account.

Increased Interest Rates

If you miss a payment, sometimes your interest rate can increase. This unintended consequence can cost you thousands depending on the balance on your overdue credit account. The average interest rate for a credit card in the US is 16.05 percent, if you make a late payment your interest rate could easily double. Imagine paying over 30 percent interest on a bill you’re already having trouble paying. This could also raise your balance over its limit costing you even more money.

Lower Credit Score

The heaviest factor in your credit score calculation is your payment history accounting for 35 percent of your total score. It’s also the fastest way to improve or damage your credit score. Even one late payment can drop your score several points, which could come with the consequence of higher insurance rates, being denied for a mortgage or auto loan and even being disqualified for a new job. Another thing to think about is the fact your credit utilization accounts for 30 percent of your overall score. If you’re using more than 30 percent of your overall available credit this could also drastically reduce your score. I know from experience, I was at 32 percent utilization and paid it down to 28 percent. My score went up 31 points by reducing my utilization rate by just four percent.

Account Closure

In cases where you are 60-90 days overdue on your credit account, the creditor could choose to close your account and turn you over to collections. Depending on the type of credit account this could be a serious issue causing a foreclosure on your home a repossession of your vehicle. This is extremely damaging to your credit score and your ability to secure financing in the future.

The best advice I can give you is to call your creditor when you think your payment is going to be late. Sometimes they’ll offer you a grace period or a payment plan to help you get current and stay current on your payments. Life happens and sometimes unexpected situations arise that cause you to make a late payment. Communication is key. Most creditors will appreciate your honesty and work with you.

Having the intimate knowledge about the inner-workings of the bankcard system is not mandatory but then there’s no harm in knowing it. Understanding how things actually work is a good approach, as fees are incurred at times at one or the other stage. The main components in the whole process involve:

1. Key players
2. Credit card authorization
3. Credit card clearing and settlement

Credit card processing services are so quick and timely that within few seconds, transaction details are transferred from the terminal to a processor. Later, this information is passed through the card network to the issuing bank. Once all this happens, the issuing back sends an authorization back to the processor via the network.

In the whole system, obtaining an authorization for a transaction remains the first step. Before the sales are deposited in the bank account of the business, it is necessary that the authorizations are settled. Settlement and authorization are the two major processes of transaction. If ever this happens a failure be it complete or partial, it leads to sales not deposited or increased costs.

The Key Players

Key players involved in authorization and settlement include:

1. Customer
2. Service Provider
3. Acquiring Bank
4. Issuing Bank
5. Card Associations (Visa and MasterCard)

Let’s discuss every player one by one.

1. Cardholder: This term refers to the one who gets a credit or debit card from an issuing bank. The card is then presented to the merchants as payment for the services or products.

2. Service Provider: Service provider is the business that is engaged in the sale of services or products. It can also be said that it is a business that allows accepting credit as well debit cards.

3. Bank of the service provider: It is often referred as an acquiring bank. This is because it creates and maintains accounts and enables businesses to accept credit and debit cards. Moreover, these banks provide software and tools to accept promotional materials, cards and other important elements needed in card acceptance to the merchants.

4. Issuing Bank: An issuing bank provides credit cards to the customers. It is important to know that this bank is a member of the card associations. These banks pay the banks for the sales or purchases made by their cardholders. Repaying the issuing bank as per the norms of card agreement is the responsibility of the cardholder.

5. Card Associations: As MasterCard and Visa are not banks, they serve as a guardian and clearing house for their card brand. In addition, they monitor the community of ISOs, MSPs and financial institutions that work jointly to support credit card processing and electronic payments.

This was all about the important parameters of credit card processing. To keep transparency in the credit card processing mechanism, keeping these important points in mind is quite helpful.

Paycron has been recognized for leveraging top-notch merchant services for customers. Different payment solutions are provided ensuring that the business, whatever the size, remains well connected.