Credit Karma offers free credit scores and tools to help consumers better manage their money. Is it worth it? Bottom line: Yes, as long as you don’t mind the ads.
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I’ve used Credit Karma for years to track my credit score. It updates my score monthly, showing the factors that are helping or hurting my credit score. It also provides detailed information on my credit report, all in one place. As useful as I’ve found Credit Karma, I’ve also fielded a ton of questions about the service:
- Is Credit Karma really free?
- How accurate are the credit scores?
- Is your information secure?
- What's the catch?
In this full Credit Karma review, I’ll answer these questions. I’ll also demonstrate the key features of Credit Karma.
Credit Karma Credit Score
CreditKarma is a website that can help you control your finances by providing a report card of sorts. This overview covers your credit report and score, savings account advice, credit card guidance, and other financially specific resources. Unlike other credit reporting sites, you’ll find two major differences that exist in the Credit Karma philosophy:
- There is no monthly trial membership or initial credit card charge for signing up. Yes, it is totally free.
- You are given a credit report card. This report outlines the main categories of your credit report like inquiries, past due balances, bankruptcies, etc., based on data from TransUnion and Equifax.
When you log into your account, you will land on a personal dashboard that shows you an immediate credit summary. This includes:
- TransUnion and Equifax Credit Scores: This is not your FICO score, but your credit scores from two of the three major credit bureaus, TransUnion and Equifax (the other is Experian). These will give you a very good idea of where you would stand with your true FICO score, though. You can also see the difference between the information each bureau is receiving to determine where any differences in score may be originating. Here’s a screenshot from my account at Credit Karma:
- Factors Affecting Your Credit Score: These include reported delinquencies, inquiries, collections, credit utilization, and your average age of accounts (AAoA). You will also see the discrepancies (if any exist) between what is being reported to TransUnion and what’s reported to Equifax.
In addition to what you initially see, there are also additional tabs, sections, and features with tons of information about credit, savings, loans, and many other financial topics. The perks that come with signing up for a Credit Karma account are found in some of their neat resources, which you simply can’t find anywhere else.
Is Credit Karma Really Free?
I answered this question above, but it’s worth repeating. Credit Karma is free. There are no trial periods and no credit card is required.
Key Credit Karma Features
Credit Karma offers a lot more than just credit scores. Here is a list of the key features that I find the most useful.
- TransUnion Credit Score: You'll see your credit score based on credit data at TransUnion. The score is calculated using VantageScore 3.0. You'll also see a history of changes to your score over time.
- Equifax Credit Score: You also get your credit score based on data maintained by Equifax. This score is also based on the VantageScore 3.0 formula. Because the credit data on file can differ between TransUnion and Equifax, your scores will likely be different as well. In my case, the difference was 11 points.
- Credit Factors: You'll receive a list of the factors that are either helping or hurting your score. These factors include credit utilization, payment history, derogatory marks in your credit file, the age of your credit history, credit inquiries, and total accounts. We'll dive into this a bit more below.
- Credit Score Simulator: This tool can be helpful to understand how certain events will affect your credit score. For example, you can get an idea of how applying for a new credit card will affect your score. This can be very useful if you plan to buy or refinance a mortgage and want to avoid lowering your credit score. I'll cover this feature in more detail below.
- Search for Unclaimed Money: This is a new feature that Credit Karma recently added. You can search for unclaimed money that may belong to you. The search is by state, and you'll be directed to a state-specific resource where you can conduct an online search.
One big aspect of the CreditKarma.com genius is its credit simulation feature. This tool can help you predict how your credit score will be affected by certain actions. Do you plan to close a credit card, or purposely make a late payment because you can’t afford to send the check on time? Well, using this simulator, you can determine whether or not your credit score changes with each action.
You can simulate all of the following:
- Open a New Credit Card
- Add a New Loan
- Add Credit Inquiries
- Increase the Credit Line on One Card
- Open a New Credit Card and Transfer Your Balances
- Close Your Oldest Credit Card Account
- Increase or Decrease Your Credit Card Balances
- Pay Off All Credit Card Balances
- Allow ONE Monthly Payment To Become Past Due
- Allow ALL Monthly Payments To Become Past Due
- Have An On-Time Credit History
- Add Public Record To Your Account
- Have One Account Go Into Collections
Another cool feature is the Credit Factor report. This tab allows you to get a birds-eye view of your credit report according to TransUnion and Equifax. You can see exactly how much of your credit is being utilized, how many collections or late payments are being reported to each bureau, the number of inquiries you’ve racked up, etc. And what’s always interesting to me is that they are almost never a perfect match between the bureaus.
You may be used to checking your credit through only one or two bureaus. However, it would be very useful to check at least two, if not all three. Having a compare-and-contrast option within Credit Karma’s dashboard makes this simple and quick.
There are plenty of other smaller features within Credit Karma that help consumers manage their loans, savings and CD accounts, credit cards, and almost any other financial account you can think of. The site also has its fair share of outside credit card and free-trial offers because providing a free service means they have to make money somehow. If you can avoid signing up for offers and don’t mind providing your contact information to a third-party provider, Credit Karma is a reasonable option to help you better understand how your credit report and score will affect your financial future.
Credit Karma takes your sensitive information seriously. It uses 128-bit encryption to ensure that your data is safe it’s next to impossible to hack when being transmitted. Plus, Credit Karma explicitly states that it won’t sell your personal information to other places, aka third parties.
You can use Credit Karma right on your phone by downloading their Android or iOS app. In addition to all the features you can access on the desktop and mobile website, users can get alerts and push notifications. That way, you can be alerted of any changes to your credit profile or your account.
If you run into issues, Credit Karma suggests checking for the latest version of the app to ensure you’re up to date. Otherwise, you can contact them via Credit Karma’s member support page.
Credit Karma also has a robust online help center where you can search for your question and it may pop up with an answer for you immediately.
Pros and Cons
Very easy to use
TransUnion credit score
Equifax credit score
No FICO score
If you want to regularly monitor your FICO score, then myFICO is your best bet. You’ll need to pay a monthly fee — there are three membership tiers to choose from — but you can access your information anytime you want. The perk is that this is the type of information lenders will mostly like to see when they approve you for a loan.
Other features include seeing how your score will fare against certain decisions like applying for a mortgage, alerts for new activity on your credit card, and tools to see how changes you make can affect your score.
Is Credit Karma Right for You?
Credit Karma is a great option for those who want to keep an eye on their credit score fairly regularly, such as those who are looking to repair their credit or build their credit for the first time. The recommendations and simulators are both useful tools for that. That being said, if you already have a free service like this through your credit card or bank, you may not need Credit Karma’s service. Since it’s free, you have nothing to lose by signing up — at the very least you can see what credit products you may have a chance of being approved for.
Frequently Asked Questions
Is My Credit Score on Credit Karma Accurate?
Your score is fairly as accurate as of the one you’ll see on Credit Karma. It’s calculated every time your score changes and is updated frequently. The important thing to note is what the score means — whether it’s bad, fair, very good, or excellent.
Will Using Credit Karma Hurt My Credit?
No. The way it retrieves your credit score is through a soft inquiry that is not reported to the three major credit bureaus.
Why is My Score on Credit Karma Different from the FICO Score?
Since Credit Karma uses VantageScore, you won’t be able to access your FICO score since it uses a different scoring model.
Keeping track of your credit score can be a cumbersome and expensive task in its own right. Credit Karma is a reliable and free website that just does this. It has plenty of features including a dashboard, tabs, and resources to keep you informed and in charge of your credit.