Many people are familiar with Credit Karma's ads, but is their service truly free? Here's everything you need to know.
Maybe you've seen their commercials or you've seen their online ads.
You wonder—is Credit Karma really free?
Can I really see my credit score without it affecting my credit?
This in-depth article will answer the most common questions we've received about Credit Karma, as well as give you all the details you need to make a confident decision about using their service.
Read on for all the details:
What Is Credit Karma?
Credit Karma is a free online service that lets users see their credit reports from two of the three major credit reporting bureaus (Equifax and TransUnion).
Because credit scores can (and do) change often, members of Credit Karma get update alerts
every week about any changes that could affect their score.
If you want to see just the basics of your credit report without it affecting your score, Credit Karma is an easy, free way to do just that.
Credit Karma's History
Credit Karma was founded in 2007. As of April 2015, they boasted over 35 million members.
In 2016, that number hit 50 million. Credit Karma was founded by Kenneth Lin, previous founder of Multilytics Marketing.
Working with E-Loan and Upromise to launch Credit Karma.
Credit Karma was able to secure venture funding – raising $368.5 million – while being valued at $3.5 billion.
Credit Karma's Business Model
All of Credit Karma's services are free to consumers.
Credit Karma makes money through revenue from targeted advertisements for various other financial products.
Credit Karma is also paid by lenders for successful recommendations.
How Does Credit Karma Work?
Credit Karma allows you to see your credit reports and credit scores from Equifax and TransUnion.
You sign up via an online form that asks for your name, address and social security number.
Your social security number is not stored on their servers and is only used to retrieve your first credit score.
You can also optionally enter your annual household income and monthly household income.
This information is used by Credit Karma to give you a more personalized report on how much money you could be saving.
It is also used to help find credit card offers that may fit your needs.
What is VantageScore?
VantageScore is a relatively new type of credit score calculation, used by Credit Karma to determine your score.
It is similar to the FICO score that has been used for decades now.
As you may know, your credit score varies from bureau to bureau – as well as from lender to lender.
Every lender has their own criteria as to what kind of credit you have, and their own way of scoring it so you may potentially have hundreds of scores!
That's a lot of headache, which is why VantageScore was introduced.
It was revealed in 2006 and developed by the three major credit bureaus (TransUnion, Equifax and Experian) to help provide a more consistent scoring model.
VantageScore does this through its predictive modeling, which incorporates a broader set of credit-related data to calculate your score.
It typically looks back through the last 2 years, tying together your credit activity from the timeframe, but it can also go back further than that.
This is great news with customers who don't have much of a credit report built yet or who are working on rebuilding their credit.
VantageScore also offers many other benefits, such as an updated scale range that works with many lenders' automated credit approval systems, as well as different weights that impact your score more than others.
Much of this depends upon your personal credit history, but some things, like collections accounts that are paid in full, won't even factor into the calculation of your VantageScore.
VantageScore weighs risks differently too. Again, every person's credit file is different, but typically it works like this:
Payment History (extremely influential) – The number one predictor of risk for both FICO scores and VantageScores. Creditors use this calculation to determine the likelihood of you paying your debt on time.
Age and type of credit (highly influential) – Your account age and the length of your credit history demonstrates whether or not you have a variety of account types (credit cards, loans, etc.) and how long you've had them. Does your credit history jump from card to card or is it fairly stable? That's what this factor looks at.
Credit Utilization (highly influential) – This calculation divides your balance by your available credit. You should ideally keep your balances under 30% of your total credit.
Total balances (somewhat influential) – This category looks at the balances of both your current debt and delinquent debt. Reducing the amount of debt you owe can help your score improve.
Recent credit behavior (less influential) – This looks at how many credit accounts you've opened recently and how many hard inquiries have been placed on your file. A hard inquiry is when a lender or credit card provider checks your credit report when making a lending decision. Hard inquiries could lower your score by a few points and can stay on your credit report for two years.
Available credit (least influential) – This factor looks at the amount of credit you have.
As you can see, VantageScore takes all of these points into consideration, as well as both your short term and long term credit history when calculating its score.
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What Services Does Credit Karma Offer?
In addition to providing you with your free credit score from two of the major credit bureaus, Credit Karma can also provide you with personalized credit card offers.
This is a great service if you are building new credit or rebuilding your existing credit.
Credit Karma also monitors your TransUnion credit score for you daily and notifies you of any significant changes to it.
You can also connect your bank and loan accounts to Credit Karma and get access to tools that help you track and analyze how you spend your money.
You can also optionally set alerts to remind you when a bill is due.
Recently, Credit Karma also started offering a free tax return service.
Credit Karma calls this service "truly free tax returns" and insists that there are no upsells and no hidden fees (as opposed to many so-called free tax return offers).
For example, with TurboTax online, you could fill out your return for free, but then you were charged to file or print your return.
Who simply does their taxes but doesn't turn them in? Nobody.
TurboTax now advises customers that their service is "free to file and free to start" (but not free to submit or free to print). Be careful!
Now, with Credit Karma's tax return service, you have to submit a great deal of information, similar to the details you would add into a tax return software.
However, in submitting all of this information and getting your return done for free, you agree to let Credit Karma use your tax information across the rest of their business as well—including getting loan and credit card offers that you may qualify for.
This isn't so much a "gotcha" like TurboTax's service, but more of an insight into how Credit Karma makes money and keeps the service free.
Are Credit Karma's Services Free?
Many consumers are understandably concerned about free services that turn out to be anything but.
However, Credit Karma does offer completely free services and does not sell your information to other credit card companies.
In fact, their site only serves as a recommendation gateway to these credit card offers.
It uses a variety of algorithms to help pinpoint credit cards that may be right for you based on your current credit situation.
Depending on your credit profile, Credit Karma may recommend other products as well, such as the option to refinance a loan if it determines you could be overpaying.
Of course, you are under no obligation to sign up for these services.
The free credit reports are still free.
How Does Credit Karma Stay Free?
Credit Karma receives compensation from lenders for successfully recommending credit cards and related financial products to consumers who ultimately choose to apply for those products.
They also receive payment from advertisers for showcasing different financial product ads.
This allows them to offset the costs associated with providing free credit reports to consumers as well as credit monitoring.
How Do I Use Credit Karma's Services?
Credit Karma is easy and fast to sign up for. Through their website, you simply answer a few basic questions to start the account creation process.
How to Sign Up
First, visit www.creditkarma.com and click the Sign Up button.
Be sure you've typed the URL correctly as there are scam sites that take advantage of misspellings.
You'll enter in some basic information for your account, such as your email address.
You'll also choose a password in this step.
You can optionally choose to receive updates by email to your credit report and other important notifications about your credit profile, as well as opt in to special promotions.
You'll also need to choose a security question and answer to further protect your account.
On the second page of the sign up process, you'll need to share a bit more information about yourself in order for Credit Karma to find your score.
You'll also need to enter your full name, address and zip code, as well as your date of birth.
Finally, you'll need to enter your social security number (the first five numbers will be hidden with asterisks – only the last four numbers will be displayed on your screen after you finish typing them.
The reason for inputting your social security number is so that Credit Karma can locate your credit report and score for you.
You'll notice that in the sign up process, Credit Karma never asks for your credit card or payment information.
How User Friendly is Credit Karma and its Services?
Credit Karma has been reviewed by many users and rated highly for its ease of use.
Even if you don't consider yourself "technology savvy", Credit Karma's site is easy to use and the sign up process is very straightforward.
Once you complete the sign up process, you'll be amazed at how easy and intuitive it is to see your credit score.
The numbers can be found on an easy-to-read "odometer-style" chart, and it tells you which credit bureau (TransUnion or Equifax) they come from.
It also lets you know the next time the score will update automatically, so you can check back then.
Of course, you are entitled to a free credit report once a year by going to
AnnualCreditReport.com, however the result you get from that site is 50+ pages of details and technical language.
Credit Karma transcribes that information into a much easier to read and much more straightforward result, so that you know precisely where you stand, credit-wise.
How Do I Monitor My Credit Reports and Scores?
Credit Karma's credit monitoring service monitors your TransUnion credit report for you and updates it each week with any changes.
You can check your communication settings under your profile page to ensure this monitoring service is enabled.
It costs you nothing. You can also check your credit reports for errors at any time free of charge.
What Are Some Other Useful Features of the Service?
Credit Karma has a number of helpful tools beyond its free credit monitoring and credit reports from two major bureaus.
With these tools, you can see how certain actions affect your credit score, how your credit score compares with others across the country (completely anonymous) and how much home you can afford if you are considering getting a mortgage.
Credit Score Simulator
The credit score simulator will help you see how your credit choices can affect your score.
It does not actually affect your score—but helps you understand the "what ifs" of your credit decisions.
For example, what might happen if you get a new loan, transfer balances to a new card, open a new card entirely or close an old credit card account?
You can use the simulator to see how these items and many more affect your credit score.
Home Affordability Calculator
See how much home you can afford with this calculator.
Simply enter in your monthly income before taxes, your down payment, your monthly payments and your mortgage interest rate, then click the calculate button to see how much you can realistically afford to pay for a home, as well as gauge your monthly payments.
Debt Repayment Calculator
How long will it take to pay off your credit card debt?
This free calculator will show you. You can estimate the cost by choosing to make only the minimum payment, making a fixed amount that you choose, or finding out how much you'd have to pay every month to be debt-free by a certain time period (in months).
Simple Loan Calculator
Have you ever wondered what your payments would be for different kinds of loans?
This simple loan calculator can help you find out.
Enter in the loan amount, the interest rate and the number of years to find out how much you'd have to pay.
Amortization is the gradual reduction of debt over a certain period.
If you'd like to see this reduction, you can use the amortization calculator to show it.
One example of this is the payment of a mortgage.
Your payment goes toward the interest and the principal, changing the balance over the life of the loan.
Most of your initial payments on a mortgage are used to pay interest.
For example, in a 30-year mortgage, over 83% of your payments are used to pay down interest the first year, while only 3% of your payments are used to pay down interest in the last year of your mortgage.
This is why so little equity is built in your home during the first few years of your mortgage.
Refinance Credit Card Debt
Although not specifically a tool, this service will help you determine which lower interest credit cards may be available to help you refinance high interest credit cards into a potentially lower rate.
Credit Karma compares credit cards from dozens of companies to give you the best possible reviews and recommendations.
The calculator tools are available free of charge to Credit Karma members to help them make better financial decisions and choices with regard to their credit.
Since these calculations don't affect your credit, you're free to try out different "what if" scenarios to find out what you can afford and by when.
How is Credit Karma's Customer Service?
Credit Karma conducts its customer service through email only.
You can go to their customer service area: http://help.creditkarma.com and see answers to asked questions, such as how to change your email address, or what to do if you forget which email address you signed up with.
If you can't find the answer you're looking for, you can submit a request through Credit Karma's online support system or read help articles about using the site tools, how to cancel the service, and so on.
Credit Karma does not have a customer service phone number or a live chat interface, so if you're hoping for instant answers—you won't get them.
Depending on the severity of your issue, however, you will likely find your support email answered relatively promptly.
You can also choose to get help from other Credit Karma users via a Q & A style forum.
Is Credit Karma Safe and Legitimate to Use?
Credit Karma has earned a great deal of trust through the millions of users who take advantage of its services.
It's worth noting that if you misspell the name (i.e. Karma with a ‘c' or credit with a ‘k') you will be taken to other sites which are not affiliated in any way with Credit Karma and are designed solely to separate you from your money as quickly as possible.
It's also worth noting that credit reports themselves are not free—they aren't free for Credit Karma, or banks, or even the three major credit bureaus to receive.
The company in charge of creating the credit score, Fair Isaacs, uses their proprietary algorithm to distill dozens of pages into a number which becomes your credit score.
This also doesn't happen for free. Even the three major credit bureaus have to pay the Fair Isaacs company something depending upon their agreement with them.
And while Credit Karma does offer free credit scores and free monitoring of your credit report, it also cannot afford to simply give these things away without having another way to make money.
The way they make money is by using your information to find lenders who may be able to provide you with better credit card or loan offers.
The important thing to remember is that if you go to get a free credit report online from any site other than AnnualCreditReport.com or Credit Karma, the site will ask you to input a credit card number.
This actually subscribes you to their "credit monitoring service"—something Credit Karma gives you free of charge.
Credit Karma never asks you for a credit card when you go to view your score or your report.
What are Some of the Strengths of Using Credit Karma?
Credit Karma offers a number of advantages over going through the time-consuming hassle of getting your credit reports individually from the three major bureaus, or going through a questionable "free credit score" service.
Credit Report Card
Just like in school, your credit is "graded" by Credit Karma, with designations of A-F for excellent to poor credit respectively.
This lets you see precisely how good your credit is, or if it needs some work.
There are no cumbersome reports to wade through and no difficult language to decipher.
The system is very straightforward and easy to understand, and you can see just how much your credit changes on a week to week basis.
You may be surprised at what you see!
Equifax and TransUnion Credit Scores
Credit Karma provides you with scores from two of the three major credit reporting bureaus, Equifax and Transunion.
Even going to these two sites individually will try to rope you into their credit monitoring and related services (which both have a cost).
Save yourself the trouble and avoid entering your credit card number completely by getting your scores directly from Credit Karma.
On-Time Payment Percentage
One of the ways in which Credit Karma "grades" your credit is by way of an "on time payment percentage", which is as you might expect, the percentage of on-time payments you make.
The more you do this consistently, the better your grade improves.
Credit Karma even tells you whether or not your payment history would improve in a certain timeframe with the payments you make – which can be a great motivator for many people to improve their credit.
Notifies Users of Suspicious Activity
Through its free credit monitoring service, Credit Karma can alert you to any suspicious activity on your credit reports.
You'll need to create a Credit Karma account to take advantage of this free service.
For example, hard inquiries could be a sign of potential identity theft – someone opening up accounts in your name can ruin your credit.
Credit Karma can send you email or mobile alerts when this happens, letting you take action quickly.
Does Not Require You to Enter Your Credit Card/Bank Information
Unlike most "free" credit report and "free" credit monitoring services that require your credit card in order to see your score (then sign you up for a full year of monitoring – billing the entire amount up front so you have little recourse to back out of the agreement), Credit Karma does not ask for or require your credit card or bank information in order to see your report or get credit monitoring.
This helps give you more peace of mind that the service is free – precisely as the company says it is.
What Are Some of Credit Karma's Weaknesses?
Not every company is perfect, and there are some consumer complaints and concerns about Credit Karma, as you might expect.
We've laid them all out for you here, so you'll know what to prepare for ahead of time.
Does Not Have the Full Three-Bureau Credit Reports and Scores
Credit Karma does not pull information from Experian, the third credit reporting bureau.
If you want to see all three of your credit reports, you can go to AnnualCreditReport.com once a year to obtain them.
However, the numbers usually differ very little between reporting bureaus, so having two out of three isn't as big of a deal as you might think.
Still, in order to get the full picture of your creditworthiness, you may wish to check Experian in addition to getting your two free credit reports from Credit Karma.
Offers Only Email Support
Credit Karma only offers email support to help customers.
Its online system is more of a Q & A forum where you can optionally get assistance from other users.
If you're looking for Credit Karma's phone number or trying to reach a customer service agent – you won't find it.
This can be a deal-breaker for some people who just want to talk to a human on the phone.
It's email support or nothing.
The Scores You See on Credit Karma May Not Be the Same as Scores Used By Lenders
Many lenders use the FICO® score by Fair Isaacs Corporation.
This credit score calculation was created in 1956 to help lenders better understand a customer's credit-worthiness.
Of course, being that the system is decades old, and many lenders like banks and financial institutions are resistant to change, they still use this calculation in many cases when determining whether or not to approve you for a loan or other credit.
The VantageScore used by Credit Karma is a much more modern (2006) calculation algorithm that some lenders are finally warming up to.
It takes into account many of the things that a FICO® score does not, such as a broader range of credit-related information and the ability to look back well beyond the standard 2 years of credit data to determine your score.
So the concern is that many lenders are still using the old-fashioned FICO® score over the newer VantageScore.
It's a good idea to get your FICO® score as well, which you can do from the
AnnualCreditReport.com website once a year.
This way, you'll have both numbers and can better gauge your ability to apply for credit.
No Chat Option Available
In this digital age where on-demand and always-on are reflections of real life rather than buzzwords, it can be a comfort to many people to have the option to chat live with a customer support specialist.
Unfortunately, Credit Karma does not currently have this option.
All support inquiries are handled exclusively over email.
Frequently Asked Questions About Credit Karma
When it comes to determining your credit score or finding out what's on your credit report, you may still have many questions.
Fortunately, we've collected some of the most commonly asked questions (and answers) about Credit Karma for you here in one place:
- Is Credit Karma Trustworthy?
Credit Karma does not ask for your credit card information for any of the free services it provides, including your credit score or credit monitoring.
Because they don't ask for this information, they have no way to charge for it.
Some people may be reluctant to complete the process because Credit Karma does ask for your social security number—but this is only used to pull your credit report.
- What is Credit Karma's BBB Rating?
Credit Karma is not currently BBB accredited.
It's worth noting that the BBB is not a governmental organization and exists solely as a ratings/review platform (albeit, a very well-known one!).
- Does Credit Karma Run My Credit Score or Affect My Credit Score?
There are two types of items that appear on your credit report.
The first, known as a "hard pull" is when a lender gets a detailed look at your credit information in order to determine whether or not to approve you for a loan (like a mortgage or car loan) or a credit card.
These "hard pulls" can knock your credit score down a few points, particularly if you have several of them within a short timeframe.
There are also "soft pulls" which are like "glances" to your credit report and score.
This is the kind of pull that Credit Karma and other legitimate credit reporting services do. It does not affect your credit score.
- What Are The Most Common Complaints About Credit Karma?
Consumers often seek out review sites, such as the Better Business Bureau and other online services to voice their complaints if they feel that they aren't getting the help they need in a timely manner.
Here are some of the most common complaints about Credit Karma:
Tax Filing Problems
The most common complaints about Credit Karma are in regards to its tax services, with consumers wondering whether or not their form submissions went through correctly or those who were having trouble using the site in these cases.
When consumers run into problems, they can't call someone at Credit Karma for assistance
which further exacerbates their frustrations.
Giving Up Personal Information
Many consumers understandably don't like giving out personal information on any website – and particularly not their social security number.
The issue however, is that this is needed in order to get their credit score.
There is no other method to obtain it than by using the user's social security number.
Not All Reports Shown
In some cases, the report you don't see (from Experian) could be the one that's most important to you.
In a few instances, customers were denied loans or other credit applications because of issues on their Experian credit report.
Since Credit Karma does not provide this information, the users falsely believed they would get approved based on the details from Equifax and TransUnion alone.
Getting their score from Experian could have resolved the issues.
Many consumers enjoy the convenience and ease of use that widely available email services like Yahoo, Hotmail and Gmail provide.
However, in some cases these email addresses were hacked.
Unfortunately, these same email addresses were tied to users' Credit Karma accounts.
In cases like this it would be reassuring to be able to contact customer service via a phone number.
But since email support is the only option, customers find themselves waiting and waiting to hear back from what is understandably a legitimate concern.
- Is Credit Karma Safe to File Taxes?
Unlike with TurboTax and other online tax filing systems, Credit Karma does not charge you to submit your tax forms.
It even includes tax forms beyond the standard 1040/1040 EZ and includes many of the forms that LLCs and the self-employed use to file their taxes.
This makes it very attractive to entrepreneurs, landlords and small home-office users who typically could not use free tax filing services in the past.
And although the service is free to use and secure, it was only launched in January of 2017, which means there may still be some quirks left to iron out in the online interface.
Users who are experiencing trouble filing their taxes through Credit Karma are encouraged to use the online support system through email.
- How Often Does Credit Karma Update the Scores?
Credit Karma updates your credit score every seven days.
You may not think it would change much in that timeframe, but you could be surprised.
Continuing to pay your bills and loans on time, taking out less than your available credit, and paying down your largest loans first can all make a significant impact on improving your credit score over time.
- How Accurate is Credit Karma's Credit Score?
Here, it's important to define what's meant by "accurate".
Because Credit Karma uses VantageScore—a different method of calculating your creditworthiness than the traditional FICO® score, there may be several points difference – and likely tipped in your favor.
This is a great boon for your self-confidence, of course, but since not all lenders use VantageScore as a means for approval, your credit score numbers may be quite a bit different between your VantageScore and FICO® score.
Although more and more lenders are choosing the VantageScore, if you are concerned and want to see the full picture of your credit score, it may be worth getting your FICO® score as well.
- Why Does Experian Not Show in Credit Karma?
Credit Karma does not currently have an agreement with Experian to show the details from their assessment of your credit score.
Users are encouraged to consult with the Experian website directly if you wish to obtain your Experian score.
- Why Are the Scores I See on Credit Karma Different from FICO?
CreditKarma uses the VantageScore, a more modern and updated series of calculations and algorithms developed by the three major credit bureaus, to determine a consumer's credit-worthiness.
The FICO® score has been around since 1956, and as you might imagine, finance and technology, as well as credit and lending opportunities have changed dramatically since then.
While many lending institutions are slow to warm up to new technology, it's common for them to still rely on the FICO® score as a measure of one's "lend-ability".
While there's nothing wrong with choosing one or the other, it's worth noting that there are hundreds of potential outcomes for your credit score numbers depending on which items your particular lender gives the most weight to in terms of their assessment of your application so it's not as simple as choosing a FICO® score over a VantageScore or vice versa.
If you're concerned about your creditworthiness, it's a good idea to get both, just to see the big picture of your credit overall.
Keep in mind, depending on the type of loan you're considering applying for, your lender may use the FICO® score.
As every lender is different and has their own preferences, there is no "one size fits all" approach.
- Can I Print My Credit Score Off of Credit Karma's Website?
While some companies let you see your credit score, but charge you money for the "privilege" of printing it, you can easily print off your credit score numbers from Credit Karma's website.
To do so, simply go to the report summary page, which provides links to your TransUnion and Equifax credit reports respectively.
When you get to your report, simply click "Print This Report" in the upper right corner of the page, under the date of the report.
- How Can I Reach Credit Karma's Customer Service?
Credit Karma's customer service is solely available via email.
There is no customer service telephone number or live chat to reach Credit Karma customer service.
To email them directly, use firstname.lastname@example.org or fill out the form on their website at help.creditkarma.com.
These options are for reaching customer service only.
If you'd like to submit general feedback about the service you've received from Credit Karma, or you have general questions, you can find them on Facebook at https://www.facebook.com/CreditKarma or Twitter at https://twitter.com/creditkarma
- How Do I Delete My Credit Karma Account?
Should you decide to delete your Credit Karma account, keep in mind that you will not be able to create a new login on the site for six months.
If you'd still like to delete your account, just follow these steps:
- Go to http://www.creditkarma.com/about/help and scroll down to the "How Can We Help?" option
- Choose "Cancel My Account and it will prompt you to log in if you haven't already.
- If you haven't logged in, you'll be shown the same screen where you'll need to again, scroll down to the "How Can We Help?" / Cancel My Account choice.
- After selecting "Cancel My Account, it will prompt you with a "Get Started" message and let you know that you are about to cancel your account. You'll need to click "Account Cancelation".
- You'll get a confirmation message in red that reads "Confirm Cancelation". Once you hit the confirm, the system will ask you to log in once again. When you try to, it states "This Account Has Been Deactivated".
If you'd rather cancel your account by mail, you can do so by sending the following information in a letter:
- Your full name
- Your date of birth
- The email address associated with your Credit Karma account
- A request to cancel your account. This is very important!
Then mail your cancelation request to:
Credit Karma, Inc.
Attn: Account Termination
P.O> Box 520
San Francisco, CA 94104-0520
Staying Informed About Your Credit
Hopefully, this detailed article has provided you with some guidance on whether or not to get your free credit report from Credit Karma, or given you an alternate way to fill and submit your taxes online.
By displaying the pros and cons, as well as common questions people have about Credit Karma, it is our hope that you'll be able to make an informed decisions that will help you enjoy greater financial understanding.
Considering all of the tools that Credit Karma makes available to its users free of charge, in addition to the credit monitoring and reporting services it offers, you simply can't beat the price.
In addition, you can use this information to become better educated about your finances and the impact your decisions can have on your credit score – both today and well into the future.
Whether you're considering buying a home, applying for a car loan, or you need to rebuild your credit, Credit Karma has the tools, community and reputation to help you make the most of your financial situation.
Try them out today and see where your credit stands, and what you can do to improve it.