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Looking for a website that allows you to check your credit score but don’t want to pay a bunch of money to see where you stand? Chances are that you’ve come across Credit Karma ads either online or even on the television. They promise you can get your credit scores and report for free.
Credit Karma promises that you can check your credit scores when you want, regardless of your location, and without paying for it, but what’s the catch? We tested out this site to see what the buzz was all about. Below is our comprehensive unbiased Credit Karma review and credit tips.
Why Do you need to Check your Credit?
Why do you need to know your credit score? Any time you apply for credit, a travel card, an apartment, a home loan or a car loan, you will be required to provide your credit score so that your application can be verified for approval.
Most places state you need a credit score over 650 in order to qualify for many of the perks of qualifying for a loan. Without a decent credit score you will end up paying higher interest rates or get denied altogether for any type of loan.
Is Credit Karma actually genuine?
Yes, Credit Karma is a genuinely free online platform that offers free credit scores and reports to help you manage your money properly. Seriously!
It’s free and will not request you to enter your credit card number. It will update your score on a monthly basis providing you with reports and factors that are boosting and affecting your credit score.
If you create a Credit Karma account, you can also access your TransUnion credit report apart from your credit scores from TransUnion and Equifax.
Other websites may only be able to provide you with your credit reports on a yearly basis, but Credit Karma does that as often as once a week. It provides all these and many other perks in one place.
So whats the catch with Credit Karma?
If you are still wondering whether Credit Karma is really free, how accurate the scores are, and whether your information is safe, keep reading. This review will help you understand how you can get your credit score and report all for free.
The Credit Score
Unlike other websites, Credit Karma is different in two ways.
- Signing up is totally free. There is no membership fee charged
- You will be issued with a credit report card. This credit report card lists the main sorts of your credit report including bankruptcies, inquiries, pas due balances, and more using data obtained from Equifax and TransUnion.
Once you sign in to your account, on your personal dashboard, you will be able to see a quick credit summary with the following:
- TransUnion and Equifax Scores– This is a credit score from the three main credit agencies, TransUnion and Equifax. You can get a good idea of the state of your exact FICO score using these scores although it’s not your true FICO score.
- Factors Hurting Your Credit Score– There are many factors that could be affecting your credit score all of which you will be able to see them in your personal dashboard. These include collections, reported delinquencies, credit utilization, and your average age of accounts. You will also get to understand your credit score as reported to TransUnion and Equifax, as well as any inconsistency if there is any.
What’s Credit Karma?
Credit Karma is a platform designed to help people get their credit score for free. The platform also offers credit monitoring, federal and national income tax preparation, credit card, and loan commendations. To use Credit Karma, you do not need to provide your credit card. Most people use this platform to obtain their credit scores and credit monitoring.
Is it Really Free?
Can I really get my credit score and report for free, using Credit Karma? This is a question most people ask given that other companies claim to do this for free but will require you to enter your credit card when signing up. And after one month, you will find they have charged you for the report. They don’t disclose to you the fact that the free is for the first month of signing up. Credit Karma is 100% free even if you don’t cancel your subscription.
So while this is not necessarily a money saving app, it is a great way to save a few buck on checking your credit! And with good credit- you can save thousands.
Main Credit Karma Features
Apart from offering credit scores, credit monitoring and reports, Credit Karma offers other essential features that aid users manage their loans, credit cards, savings, and other financial accounts.
The main features of Credit Karma Include:
Credit Score and Report For No Cost
The greatest advantage of using Credit Karma is the ability to obtain your credit score and report without paying for it or even needing to have a credit card. Ideal for those just starting out with establishing credit.
Credit Karma is the first website to provide these services for free and that’s why it is perhaps the largest online platform currently. In addition, Credit Karma uses TV ads to market their services.
Credit Karma does not use the FICO model instead; it uses the VantageScore 3.0 credit scoring model which was introduced by the three major credit agencies, TransUnion, Experian, and Equifax.
The draw about the VantageScore is that it can give you an idea of the state of your FICO score. Your TransUnion and Experian score updates automatically each time you access your Credit Karma account.
Monitor Your Credit Report For Free!
Getting your credit score and report is good but monitoring your credit report is important. Credit Karma accesses your credit report to give you your score; you will also receive alerts in case of any strange activity.
For instance, you will receive a notification from Credit Karma in case the credit agencies report the hard review when you apply for a new credit card, a car loan or a mortgage loan.
If your credit application accepted, Credit Karma notifies you as well alerting you that a new credit account has been created in your name.
As you can see, Credit Karma helps to monitor your credit report for free. We are living in a world where data breaches are rampant and getting free credit monitoring is something everyone must not ignore.
Free Federal and State Tax Preparation
A recent feature of Credit Karma that saw over 1 million people using it when it was introduced in 2017 is the free tax filing.
Using Credit Karma, you can prepare all types of tax return without paying anything.
Although Credit Karma Tax is not as easy to use as other paid services including TurboTax and H&R Block, it’s free.
Track Your Spending
By linking your bank accounts and credit cards to your account at Credit Karma you can track your spending for a given period of time.
Credit Score Simulation
There are certain events that can hurt your credit score. Credit Karma’s credit score simulator is the tool designed to envisage how your credit score will be affected by certain actions. For instance, the tool will help you to know how applying for a new credit card will hurt your score.
Search for Unclaimed Money
Another new feature that Credit Karma announced recently that helps you explores your unclaimed funds. You can search by state so you can search online based on a specific state-resource.
Credit Factor report is another Credit Karma’s incredible feature that allows you to monitor your credit report according to TransUnion and Equifax. This feature allows you to check how your credit is being used, the number of late collections and payments being reported to each credit agency, how many inquiries you have racked up, and more.
Given that it is good to compare your credit score from at least two agencies, Credit Karma becomes the best online platform since through this feature, you can be able to do right that.
How Does Credit Karma Make Money?
So, Credit Karma gives you your credit score and report for free. Then how does it make money?
Other services are charging up to $20 per month and others even more than that figure. This is a question that every person will ask and it’s a genuine one.
But we did an extensive credit karma review and deep dive we found that they make money through advertising. And their ads target your financial habits. For instance, if your credit score is awesome, banks will pay for ads that target people like you with their loans and credit cards since that way, they are sure you may qualify for their loans and credits cards.
So Credit Karma will show these advertisements to you and if you choose one of those offers- they receive a commission. Are you ever required to accept one of these offers? Nope, absolutely not. You can use the tool for free for as long as you like and not have to worry ever about spending money on it.
Is Credit Karma Safe?
Ultimately, Credit Karma will use your personal information to target you with its ads, but it will not share the information with third parties (that’s what I know). After all, Credit Karma provides you with helpful and useful insights into your credit health.
Bearing in mind that your credit score plays a significant role when it comes to your financial health, it’s important to know where it stands and monitor how it’s changing and what’s causing the change.
Other services take around $20 to provide you with your credit score; Credit Karma does that and many other things, all for free. It will not ask for your credit card, neither will you be required to sign up for a free trial.
In fact, Credit Karma has the following security and privacy measures when it comes to securing your privacy:
- It utilizes 128-bit encryption to safeguard the transfer of information
- It is autonomously licensed by DigiCert
- It does not share or rent your personal information with third-party
- All accounts are read-only. No one can edit or delete information and you do not need a credit card sign up on Credit Karma.
Pros of Credit Karma
- Free credit score and updates provided
- Free credit monitoring for life
- Free Tracking and Spending Provided
- Free Cash Search for lost money
- Not required to apply for a credit card or loan to enjoy the free services
- Free federal and state tax preparation
Cons of Credit Karma
- Receive a Vantage Score instead of your FICO score
- Cannot access actual credit report from the 3 major credit services
Credit Karma Review- My Verdict
How does it feel to know that you can predict what certain actions can affect your credit score? It feels good, right. That and many other things you can get using Credit Karma. Well, of course, there are drawbacks of each service but the benefits you can get by using Credit Karma well outweigh the drawbacks. So therefore we give this service a thumbs up!