You know the old maxim – if it sounds too good to be true, it probably is. Does Credit Karma sound too good to be true? You can see your TransUnion credit score for free? You can get absolutely free credit monitoring? These are services that people pay good money for and Credit Karma, a company that isn’t affiliated with any of the credit bureaus, is giving it away for free. It does sound too good to be true.

That begs the question – is Credit Karma a Scam?

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I’ve been a fan of Credit Karma for as long as they’ve been around, met some of their people, and am generally very impressed with the service they offer. It’s been a cornerstone of my do-it-yourself identity theft protection system.

They recently emailed me to say they’ve developed a new feature that makes do it yourself identity theft protection even easier – they now actively report credit alerts.

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I logged into my Credit Karma last week, part of my monthly do it yourself identity theft regimen, when I saw that they had changed the name of the credit score you receive to the TransRisk Score. I’ve always known that Credit Karma gave you a TransUnion credit score based on your TransUnion report but this is the first time I saw that it was actually named the TransRisk Score.

In addition to this name change, they added two more tabs:
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I’ve been a fan of Credit Karma for about as long as they’ve been around. It’s a cornerstone of my DIY identity theft protection strategy because it lets me view my TransUnion credit score for free about as often as I want to. I usually check once a month and it lets me see if my score has made any significant changes. If it changes significantly and I don’t know why, it might be a reason for concern.

I have a prime and personal example of why this is a good strategy for everyone.

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Every so often I get an email from readers or friends about credit and credit scores. With the economy recovering, a lot of credit cards are offering large signup bonuses for new cardmembers and they’re very tempting. Open up a card, spend some money, and get a statement credit of $50. The airline cards are even more generous, with some offers up in the 50,000 miles range.

They’re very tempting, especially to someone who is young and doesn’t mind the hassle, but credit cards always result in a hard inquiry and this can be counter-productive if you plan on buying a home or car in the near future. One of the big mysteries of the whole FICO system is how the various factors play into the score but I’ll try my best to get an answer to this vexing question.

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CNNMoney tackled the question of why you don’t need credit score monitoring. Credit score monitoring is when you pay one of the credit bureaus (Equifax, TransUnion, Experian) a set fee each month to tell you if your score goes up or down. The fees range anywhere from $15 to $20 a month (or more) and that’s $15-$20 too much.

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In the last few years, the importance of credit scores and the publicity of that importance has shot up tremendously. With the loose credit era behind us, and banks fearful of taking on more under and non-performing loans (ie. loans not being paid on time and in full), your credit score and your credit report have become more important than ever.

So it’s natural that more and more people are asking what they can do to improve their credit score. If your score is low, then there are plenty of things you can do to improve it and plenty of places that will explain what you need to do.

But what if you have a decent or good credit score? What can you do?
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Whether you think we’re out of the recession or not (I would bet “no” based on the responses last week), it’s always important to play a little personal finance defense. Today, the topic is on credit scores and how to improve your score by taking a few small steps.

These aren’t steps you can use to boost your score 100 points overnight… those don’t exist. These are simply smart moves you can make, over and over again, that will ensure your score will be as accurate and as high as possible. And if anyone says they can boost your score 100 overnight, chances are it’s a scam (unless you have some egregious errors on your report!).

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With the passing of the CARD Act, credit card companies have been responding by instituting purchase-based annual fees. Before the CARD Act, many issuers were trimming their books of inactive, low-activity, and risky credit card accounts. You may remember American Express offering cardholders a financial incentive to close accounts.

In this environment, there may come a time when you will want to cancel a credit card. A few years ago, canceling a credit card was easy. You called them and told them you wanted to cancel, they try to keep you around, you did that dance, and then diced up your card. Nowadays, you go through the same charade, but now you have to be worried about how the cancellation would impact your credit score! Boo!

So here are some tips on minimizing the impact of canceling any one credit card.

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Whether it’s driving on the highway or surfing on the information superhighway, I’ve been seeing a lot of ads for credit reports and credit scores. With the economy weak, people are looking to play defense and advertising are looking to capitalize. Like I’ve said in the past, checking your credit report annually is one of the best financial things you can do for yourself.

I have one word of warning for you: Don’t ever go to a company that isn’t Experian, Equifax, TransUnion, or Fair Isaac. Never ever.

Here’s why:

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