Karma’s new credit tool builds credit through Rent, Utility Bills
The new Karma Credit feature aims to help you build credit with the everyday bills you already pay.
Credit Spark – which allows users to report time tax, phone bill usage to Transnunion, the Major Credit Bureau – was introduced as part of Intuit’s all-in-one consumer platform. The company says the platform is “seamless,” pairing agents with a network of more than 13,000 professionals to help users make smarter loans.
Credit Spark, which is free to use, can report two years of past payments, helping to create a credit file that shows lenders you have a history of being a loyal customer.
Apparently, the company says it will only include on-time payments – which means it won’t deal with you until it’s missed or missed. When a member links their accounts and chooses which debts to report, Credit Karma automatically manages, automatically sends the information, automatically sends the information.
Credit Spark is similar to SoundIan Boost, another free service that helps users get rid of credit by sharing only on-time payments. One main difference is that CREDIT SPRK reports only Transonion and affects the Vatagescore model, while Experian Boost affects FICO scores 3, 8, 9 and 10, and vantagescores 3 and 4.
“Credit Spark allows Credit Karma members to build their credit scores using the payments they’ve already made,” Ryan Steckler, head of product at Intuit Credit Karma, told Money. “Building credit in easy mode – Safe, no debt, no extra spending, all on your terms.”
The feature ties into Karku’s wide range of credit to make credit building easier and less intimidating.
“Improving credit scores is a top financial goal for 53% of our members,” Steckler said. “Credit Spark addresses the core member’s problem: Wanting to improve their credit score but not knowing where to start and feeling overwhelmed by the credit system.”
That’s uncertainty about how credit works (and how to improve it). About 32 million US adults are considered “unseen,” including 7 million with no credit history and 25 million with small files, according to the Federal Reserve. Without a strong credit record, it is difficult to qualify for loans, apartments or other jobs, because credit is often a proxy for financial responsibility.
Who is helped the most – and who will not
Credit Spark is designed to help young users, renters and first-time credit builders — in fact, anyone who wants to establish or strengthen their credit history, according to Steckler. He notes that the feature may be especially useful for people with poor credit or those with small files, because they can be paid back up to two years after the payment is made at the time of purchase.
For those with good or excellent credit, benefits are very limited. Credit Spark is the only report in Transonion, which affects that Bureau report – and especially your vatagescore, the Karma credit scoring model.
Many lenders still rely on FICO scores and often pull data from Experian and Equifax in addition to Truntununion. So just because your vatagescore goes up with the help of a credit spark, it may not automatically translate into better financial opportunities.
Experts say it’s a caveat about these types of “cynics.” When programs like Experion Boost or Credit Spark boost your score, the change can only affect the scoring model. Even if the buyer should be motivated, “the promotion may not make a difference,” as Lindsay Sain Jones, a credit expert and Professor of Law at the University of Georgia, told Money last year.
Some monitor others by trading. For example, free credit enhancement programs still require users to share sensitive financial information, and as credit bureaus collect more information, errors are becoming more common. These mistakes have high stakes, because they can affect major financial decisions, including whether someone is approved for a loan, housing or even a job.
So remember: While tools like Spark Credit can definitely help you build credit, they’re not guaranteed shortcuts. Meaningful development takes time and effort.
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