When I first got into Travel Hacking, I learned that it’s really helpful to know my credit score but it’s equally important to know the contents of my credit report. In general, a credit score of 700 and above will make it easier to apply for and be approved for most of the great travel credit cards.
This is where Credit Karma comes in really handy. I am not in any way affiliated with Credit Karma. Credit Karma makes money by recommending credit products. Ignore their recommendations and use the site in the ways I’ll describe. I repeat, pay no attention to the credit cards and loan instruments they will try to get you to apply for as those are not necessarily the best for travel hackers.
Know that you are signing up for a free account with Credit Karma. With this free account, you’ll get access to your credit score from both Equifax and TransUnion which are two of the three major credit reporting agencies. The third one for information’s sake is Experian. Note that the credit scores reported by Credit Karma from Equifax and TransUnion may vary by as much as 20-30 points from each other. My Equifax score is 29 points higher today than my TransUnion score. Use the scores as a ballpark figure and know that the score is always changing based on many factors.
These days, you can find your FICO score (Fair Isaac Corporation) on many bank websites and apps. FICO score is what most banks use along with other borrower information to determine credit worthiness for extending credit. Your FICO score will often be 30-40 points lower than those reported on Credit Karma.
These are some of the banks that will show you your FICO score:
Ally, American Express, Bank of America, Capital One, Chase, Citibank, Discover, Walmart, Wells Fargo and various Credit Unions
What you want to look at on the Credit Karma site is your two credit reports. For our purposes, we want to see all the credit cards you currently have open and specifically, the ones opened over the last 24 months. The two year time frame comes into play when applying for any Chase Bank credit cards.
Chase 5/24 Rule
The Chase 5/24 rule makes you ineligible to apply for and receive Chase credit cards if you’ve opened more than 5 new credit cards from any bank in the last 24 months. As a reminder, in most cases, I recommend that you apply for Chase credit cards before any other credit cards because of the value of the points and perks they offer.
To find your credit card information, sign up for your free account and navigate on the top menu to “Accounts”. When this page opens up, you’ll see the total amount of your outstanding credit and a list of all your open credit card accounts as well a place to click to see closed credit card accounts. Any bank loans, mortgages or other credit instruments will be listed further down on the page.
Again, we’re most interested in the open credit cards. Under each credit card listed, you’ll see the date the account was opened. Note how many cards you’ve opened in the last two years from today’s date You may not see a single credit card listed in that time frame. If you do, note the number of cards and keep that in mind before applying for your first travel hacking credit card.
If you have more than 5 credit cards opened in the last 24 months, please get in touch with me to discuss your particular situation. No worries though, there are other great credit cards to start with that are not from Chase.
Two Different Credit Agencies
Get to know both of your credit agency reports. Sometimes, one credit reporting agency will not list all the credit cards you have opened. This is the case for Business Credit Cards as they generally do not appear on personal credit report even if you used your social security number as the Tax ID number when applying. One exception to this is Capital One which does report Business credit cards on your credit report.
As you dive into travel hacking, you can always refer to your Credit Karma account to double check the dates of when you opened various credit cards. This will help when meeting minimum spending requirements in the 3 month window. There’s no need to check your credit score on a frequent basis as it will move up and down based on factors such as recent new credit card approval, the paying off of a particular credit card bill in any given month and any new loan accounts.
Please contact me with any questions about your Credit Karma account as well as to discuss a strategy for applying for credit cards.