In a financial sense, you are your credit score! It’s just a reality of life in the 21st century. Lenders, landlords, employers, and even insurance companies will rely on your credit score in determining whether or not to extend credit, lease an apartment, offer a job, or even sell an insurance policy to you. The higher your credit score is, the more likely it is you’ll be approved for whatever it is you’re making an application for.
An integral part of maintaining (or improving) your credit score is to monitor it on a regular basis. That will not only let you know where your scores are, but it can also help you make improvements. For example, if your credit score is currently 660, but you want to increase it to 720, you’ll need to have a plan in place to increase the score, which will also require regular monitoring of your progress.
Two of the most popular credit monitoring services are Credit Karma and Experian. While one is a free service and the other offers various premium programs, either will provide you with the kind of credit monitoring service you need to stay on top of your credit profile.
As a matter of full disclosure, I personally use Credit Karma and while I have found the service meets my needs, I acknowledge that the choice of credit monitoring services is a highly personal one. If you’re looking for more comprehensive credit score monitoring, Experian may be the better choice.
That’s what we will attempt to determine in this side-by-side comparison.
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Why You Need to Monitor Your Credit Score on a Regular Basis
There are other reasons to regularly monitor your credit score. One is to prevent identity theft. A significant decline in your credit score can be an indication that someone has applied for credit in your name fraudulently. But, it can also indicate if a creditor is reporting negative information that may be in error.
In either case, monitoring your credit score on a regular basis gives you the ability to minimize the damage by intervening early in the process. This will be especially important in the case of identity theft, where it will be necessary to contact the lender of a fraudulently obtained loan or credit card to put a stop to the situation as soon as possible. It will also provide you an opportunity to alert your existing creditors that you have been the victim of identity theft.
There’s no foolproof way to prevent identity theft or errors from appearing on your credit report. But early intervention is the best way to regain control of your situation. That’s best accomplished by regularly monitoring your credit.
Let’s look at both Credit Karma and Experian, and see how they can best help you accommodate the goal of monitoring and protecting your credit.
Related: Best Credit Score Sites
About Credit Karma
Credit Karma is a truly free credit score provider, and perhaps the most popular among the hundreds of institutions offering free scores. Not only are their services free for consumers to use, but they don’t even require you to put a credit card on file.
Credit Karma provides your credit score based on your Equifax and TransUnion credit reports. However, the credit scores they issue are VantageScore 3.0, which is not your official credit score as used by lenders. Instead, it’s considered an educational score. However, it is based on your actual credit reports from the two credit bureaus, and will generally provide an accurate measure of the status of your credit.
In addition to providing the educational credit scores, Credit Karma also provides extensive information from your credit report, giving you access to most of the data each contains. For example, you’ll be provided with information on outstanding loan and credit card balances, payment history, public records, inquiries, and other information that regularly appears on credit reports.
Credit Karma may not provide your official FICO Scores, but the VantageScore 3.0 will provide a similar measure of the quality of your credit. It’s an excellent way to track your credit and credit scores on a regular basis, and it’s free of charge.
More recently, Credit Karma also began offering free income tax preparation.
How is Credit Karma able to offer these services free of charge? The company openly reveals that its revenue is provided by advertisements that appear on the platform. They regularly make recommendations for credit cards, loans, and other products you’re likely to qualify for. Should you click through any of the ads and sign up for the product, Credit Karma will be compensated by the advertiser. This means Credit Karma is a truly free credit score provider with absolutely no cost to you.
Based in Dublin, Ireland, Experian is the largest credit bureau in the world. The bureau supports clients in more than 80 countries, and maintains credit records on more than 235 million individuals and 25 million businesses in the U.S. alone.
As one of the big three credit bureaus, along with Equifax and TransUnion, Experian credit reports and credit scores are relied upon by lenders and other financial institutions around the world. That information is typically the basis of your ability to get a loan to buy a home or a car, or to obtain a credit card or private student loan.
And, since Experian is one of the three major credit bureaus, and issues a FICO Score based on your credit reports, that’s considered an official credit score for lending purposes. That is, a FICO Score issued by Experian is considered to be a real credit score, as opposed to the free credit scores offered throughout the credit scoring universe, which are generally only educational scores that parallel FICO Scores. (These educational scores are often referred to as FAKO Scores, since they are not recognized by lending institutions).
In addition, since Experian is an actual credit bureau, they offer the opportunity to dispute credit errors and other information contained in your credit report. If the information is determined to be in error, your Experian credit report and credit scores will be adjusted in your favor.
What Credit Karma Offers
Not only is Credit Karma one of the most popular free credit monitoring services in the industry, but it’s also incredibly easy to use. Rather than offering multiple service levels, each with its own benefits and fee structures, Credit Karma offers a single credit-monitoring plan that applies to all users.
You’ll get regular alerts and updates of your Equifax and TransUnion credit scores, which, once again, are based on VantageScore 3.0. You’ll get an alert every time there is a change in your credit score or new information appears on your credit report. That can be an inquiry, a late payment, or the opening of a new account.
Credit Karma will also provide the following information summarizing the data from your credit report:
- Payment history
- Credit card use
- Derogatory marks
- Credit age
- Total accounts
- Hard inquiries
A significant change in information for any of the above categories can result in a change in your credit score, either higher or lower. And while Credit Karma provides overview information from your credit report, it also displays individual information for each of your credit accounts. In that way, you’ll be able to identify the specific source of any changes in your credit score.
Credit Karma will also make recommendations for getting better deals on the credit accounts you have. For example, they’ll recommend an auto loan lender offering a lower interest rate. They’ll also recommend credit cards you’re likely to qualify for based on your credit profile and credit habits.
Credit Karma Tax
Like Credit Karma credit monitoring, Credit Karma Tax is also completely free to use.
You can file both your federal and state tax returns free, whether they are simple or complicated. They also pledge that you get a maximum refund guarantee, accurate calculations, and free audit defense.
More from Credit Karma: Credit Karma Savings
What Experian Offers
As the world’s largest credit bureau, it’s not surprising that Experian offers several different plans, each with its own service level and fee structure. In fact, they offer four different plans.
This is Experian’s free service. Much like Credit Karma, you can sign up for the service and you won’t even be required to put a credit card on file.
With the service, you’ll get your free Experian credit report every month. Unfortunately, it doesn’t provide you with the most basic service you’ll be hoping to get, which is regular updates of your credit score. For this reason, CreditWorks Basic only makes sense if you intend to monitor your credit report, rather than your credit scores.
This is Experian’s top of the line plan. It monitors your credit reports from all three major bureaus: Experian, Equifax and TransUnion. This will give you the ability to stay on top of your credit information from all three major bureaus.
Your Experian credit report and your FICO Score will be provided on a daily basis. However, you’ll also have monthly access to your 3-bureau credit report and FICO Scores, enabling you to monitor your credit profile from all three bureaus.
CreditWorks Premium is available at an annual fee of $249.99.
Experian Credit Report and FICO Score
If you’re not interested in an annual subscription, but you want one-time access to your Experian credit report and FICO Score, you can do so for a one-time fee of $19.99.
Not only will you get access to your credit report and FICO Score, but you’ll also be able to open a dispute online for free, should you find any errors in your report.
3-Bureau Credit Report and FICO Scores
With this plan, you’ll have one-time access to your credit reports and FICO Scores from Equifax and TransUnion in addition to Experian. And, once again, you’ll be able to open a dispute online through any of the three credit bureaus. This plan costs $39.99.
Experian Credit Lock
This is another free service provided by Experian. As one of the three major credit bureaus, Experian offers you the ability to lock and unlock your Experian credit file. You will also receive real-time alerts on attempted credit inquiries. This will keep you informed about any attempts to obtain credit in your name.
If you’re unaware of a flagged loan application, that’ll be a strong indication of potential identity theft. Armed with that information, you’ll be able to minimize the damage it may cause, while the credit lock makes it impossible for a thief to obtain credit in your name.
Experian Identity Theft Plans
Experian offers two different identity theft plans, Experian IdentityWorks Plus and Experian IdentityWorks Premium. Both programs not only come with important identity theft protection services, but also include varying degrees of credit monitoring.
The two programs are broken down as follows:
|Experian IdentityWorks Plus||Experian IdentityWorks Premium|
|Adult identity protection||One adult||One adult|
|Child identity protection||N/A||N/A|
|Dark Web surveillance, US-based fraud resolution specialists, lost while at assistance, identity theft and monitoring alerts||Yes||Yes|
|Experian CreditLock, including real-time alerts||Yes||Yes|
|Credit bureaus monitored and FICO Score alerts||Experian only||Experian, Equifax and TransUnion|
|Identity theft insurance||Up to $500,000||Up to $1 million|
|Equifax FICO Scores||Daily||Daily|
|3-Bureau FICO Scores||N/A||Quarterly|
|Monthly subscription fee||$9.99||$19.99|
Related: Which Protects You Better: a Credit Freeze or Credit Monitoring?
Credit Karma Pros & Cons
The service is completely free to use. You won’t even be required to have a credit card on file.
You’ll get continuous monitoring of the credit activity from two bureaus, TransUnion and Equifax.
Your credit scores will be updated each time there is a change in the score.
You’ll receive real-time alerts for any activity on your credit report, including new credit, inquiries for new credit, late payments, and other information.
Credit Karma will report all the details that make up your credit scores, giving you an opportunity to make improvements where possible.
Credit Karma offers your educational VantageScore 3.0, which is not your official FICO® Score as used by banks and other lenders.
They monitor only two bureaus, Experian is not included.
Your participation on the platform will involve frequent ad solicitations, which can be distracting.
Experian Pros & Cons
Experian is one of the three major credit bureaus, so you’ll be dealing directly with one of the official sources of your credit.
They provide your actual FICO® Score, which is the official score used by banks and other lenders.
Experian offers premium plans that will give you access to both the credit scores and credit reports from Equifax and TransUnion, enabling you to get a 360-degree view of your complete credit profile.
You can choose from one of several service levels, from a basic free service, to a premium service offering the highest level of credit monitoring in the industry.
Experian identity theft plans will provide protection from credit threats, in addition to full monitoring of your reports and scores.
Though Experian has a free service, it’s very limited and may not serve your needs.
The plans that offer a higher level of coverage do charge fees, ranging up to $249 per year.
Credit Karma vs Experian Which is the Better Service?
The answer to this question really depends on the degree of credit monitoring you hope to get. Credit Karma provides a good, basic credit monitoring program, and is completely free of charge. But, if you’re looking for a greater degree of monitoring capability and protection, Experian offers greater options.
|Monthly Fees||None||Varies from free to $19.99 per month|
|Number of credit bureaus monitored||Two||One or three|
|Online dispute capability||No||Yes|
|Identity theft protection||No||Yes|
|Free tax preparation service||Yes||No|
|Multiple plan options||No|
|Credit score provided||VantageScore 3.0 educational score||Official FICO Score(s)|
Which service should you choose if you’re interested in monitoring your credit? The answer will depend on the level of credit monitoring and protection you expect to get.
If you prefer casual monitoring of your credit reports and credit scores, Credit Karma will get the job done, and at no cost to you. And even though they provide educational credit scores, rather than your official FICO Scores, the scores they offer will enable you to track activity on your credit reports. After all, it’s the changes in your credit scores that will let you know when something significant is happening. Credit Karma will provide those, as well as regular alerts of any issues that affect your credit.
But, if you’re looking for a higher level of credit monitoring, and you prefer getting it from one of the three major credit bureaus, Experian should definitely be your first choice. Not only do they provide your credit report and credit scores from Experian, but their premium plans will also include Equifax and TransUnion. And, if you’re looking to include identity theft protection, Equifax offers two plans in that direction. Both also include credit monitoring as part of the plans.
If you’re looking to choose between Credit Karma and Equifax, do some serious soul-searching about the level of credit monitoring you want. Certainly, if you’ve already experienced credit problems in the past, particularly identity theft, Experian should be the preferred choice. But if you’re only looking to casually monitor your credit on a regular basis, Credit Karma will certainly get the job done.
Experian Boost Disclaimer – Results may vary. Some may not see improved scores or approval odds. Not all lenders use Experian credit files, and not all lenders use scores impacted by Experian Boost.