You’ve undoubtedly heard the term BFF as in Best Friend Forever. In fact, if you have a child under the age of 12 you may have heard it a lot more than just once. But there’s a new term you need to know – BFFF- or Best Financial Friend Forever, which just might become Credit Karma.
What is Credit Karma?
It’s a website that provides a lot of useful information. For example, if you go to the site and register, the first thing you will see is your credit score, which is free. It’s expressed as both a number and a graphic. So. for example, you might see that your credit score is 740 and rated as Good.
You’ll also see a link titled Check out your Credit Factors. Click on it and Credit Karma will display the four most important factors that are used in calculating your credit score – Credit History, Credit Utilization, Derogatory Remarks and Age of Credit History. It will also show how you are scored in these areas by TransUnion and Equifax.
A credit opportunity
Next, Credit Karma displays “Opportunities for your credit”. This will be a credit card. When we last logged in the website was recommending the Chase Freedom Unlimited card. This included a description of the card’s benefits – such as the fact that it offers unlimited 1.5% cash back with a $150 bonus after the cardholder spends $500 on purchases. There was also a little green rectangle title Approval Odds telling us that the odds were very good that we would be able to get this card.
Your credit report
Credit Karma’s next section will report any account name changes you’ve had. As an example of this, Equifax had reported that the name of one of our credit cards had changed from Chase Bank USA, NA to just Chase Card.
This page also has a link titled View Credit Report and one named Account Balance that would display all of the balances on your various accounts.
Clicking on the View Credit Report brings up a page titled Items For Your Review. It has a banner across the top with Full Credit Report, Remarks on Accounts, Multiple Names Reported and Employers reported.
This page also provides an overview of your credit report with the names of your accounts, the account type, the date you opened the account, it’s status and balance. Clicking on the name of an account brings up its details, and a box where you could dispute any errors you find. However, warning alert – most experts say if you do find errors in your credit report it’s best to dispute them in writing with whatever documentation you have that would prove the error.
Why your credit score is important
The last item on this page is a Related Article titled “Why Your Credit Score Matters”. Click on this link and you’ll get an explanation of what a credit score is, why it matters and what you should do next.
It gets even better
While all this information is good and important is not the primary reason why you might want to make Credit Karma your BFFFF.
The reason is because beginning in January, Credit Karma will file your taxes for free. This is due to the fact that beginning in the tax season of 2017 one of the credit score companies is rolling out a new thing called Credit Karma Tax. It offers totally free tax filing for most people with no gimmicks or hidden fees.
Who can take advantage of this service?
Credit Karma says that just about anyone can use this new service that files their taxes using a form 1040, 1040 EZ, or 1048. And you can be either a single or joint filer.
Unfortunately, there are some exceptions. If you have multiple state or non-resident state returns you cannot file using this service. You also cannot use this service if your state filings without a federal tax return, if you’re filling federally as non-resident federal filing, have had a foreign earned income credit or if you had a non-dependent earned income credit. You also cannot use Credit Karma Tax if you’re married filing separately in a common-law state or have income from an estate or trust on a K-1 form.
No gimmicks, really no gimmicks
When Credit Karma says that there are no gimmicks, it means it. There are no income limits, no trial periods, no expiration dates and you won’t get halfway through the process only to be up-sold a paid version. For that matter, Credit Karma Tax does not even have a paid version. The short way to describe it is that it’s available free for anyone that’s eligible to use the service – whether for state or federal returns – and that’s it period.
How Credit Karma Tax earns its revenue
The service is very upfront in that it uses affiliate marketing to generate revenue. What this translates into is that the company will analyze your personal, credit and tax information. It may even suggest certain financial products that will fit your needs such as the aforementioned Chase Freedom Unlimited card as well as debt consolidation loans or certain insurance products. Credit Karma will get a kickback if you sign up for any of these offers. This is the revenue that allows it to offer Credit Karma Tax at no cost and without it affecting you.
Rest assured
While Credit Karma will be using the information you provide to determine which products might suit you best, be assured that your personal and financial information will be safe. The company was established in 2007 and has a great track record for providing both secure and excellent services. It now has more than 60 million members and takes their trust very seriously.
You may not want to use this service
There are a lot of other entities that offer tax filing such as Turbo Tax and Free Tax USA. If you already have an established relationship with one of these providers, you may wish to continue using it. This could be especially important if the service allows you to import last year’s return as this would save you a lot of time when filing in the spring of 2017. Note: Credit Karma Tax currently won’t let you import last year’s return as it’s a new service though this may change for 2018.