Credit Karma Review: From a User (Updated for 2018)




My Credit Karma Review

Ever since I first brought up Credit Karma in my 10 free financial services post (yes, you can get a free Credit Karma account for life), I’ve had many curious friends and readers ask me questions. That prompted me to write this Credit Karma review and update it frequently.

I’ve now been a Credit Karma user for over 8 years, and update this review every few months to reflect my experience. The most common questions I receive about Credit Karma are:

  • Credit Karma ReviewIs Credit Karma free?
  • What are the benefits of using Credit Karma?
  • How does Credit Karma make money?
  • Is Credit Karma safe?
  • Is Credit Karma a scam?
  • How accurate is Credit Karma?

I had all of those questions myself. And I researched heavily. What follows is a Credit Karma review that hopefully answers these questions and more.

Is Credit Karma Free?

Is Credit Karma really free? Yes, it is. 100%. This was a big question that I had going in. You’ll notice with most other “free credit score” companies, when you sign up for their service, they ask for your credit card. And then, a month later, you’ll unsuspectingly get charged. After going back to read the fine print, you’ll notice that free was really only free for the first month, and if you didn’t cancel your subscription, you’ll get charged.

Not at Credit Karma. In their FAQ’s they state:

Q: Is Credit Karma really free?

A: Yes. Credit Karma is always 100% free.

Q: Does Credit Karma require a credit card to sign up?




A: No, and we never will. Credit Karma will never ask you for your credit card number during the registration process or at any other time.

I can confirm this is true. There are zero costs with Credit Karma.

What are the Pros or Benefits of Using Credit Karma?

Here’s a rundown of all the free benefits you can get from a Credit Karma account:

  • Credit KarmaTransUnion Credit Score: continuously updated so you can see how it changes periodically as you take actions that will impact your credit score.
  • Equifax Credit Score: you also get an Equifax credit score, in addition to TransUnion credit scores. That makes free scores for 2 out of the 3 major credit bureaus. Both scores use the VantageScore 3.0 model.
  • TransUnion Credit Report: Credit Karma has free credit report access too. By clicking on “My Overview” and “score details” in your dashboard, you can access your credit reports and check them any time (they are updated weekly). This gives you more consistent access to credit reporting throughout the year (versus 1 report per bureau per year via annualcreditreport.com), allowing you to frequently monitor and correct any errors or discrepancies.
  • Equifax Credit Report: After TransUnion credit reports were added, free Equifax credit reports were added as well.
  • Free Credit Monitoring: One of the best features of Credit Karma is free credit monitoring – so you can monitor any suspicious activity like new accounts created or credit inquiries that you did not initiate. Click in to your “profile” and look under “communications & monitoring” to set it up.
  • Credit Card Spend: You can easily track your credit card spending by category (similar to Mint) by linking accounts.
  • Credit Factors Report Card: Credit Factors allows you to see a grade on each of the factors that go into making up your credit report: credit utilization rate, payment history, age of accounts, derogatory remarks, total accounts, and credit inquiries. Good to know if you are looking to improve your credit score.
  • Credit Score Simulator: the Credit Score Simulator could be the most useful feature on Credit Karma. You get to simulate how taking certain actions (i.e. closing a credit card, opening a new one, increasing your credit line, etc.) would likely impact your score.
  • Free Tax Filing: Credit Karma is now offering free tax filing (called “Credit Karma Tax”). In its 1st year, 1 million returns were filed using the service.
  • Financial Calculators: Credit Karma offers various financial calculators for personal use: mortgage refinance, debt repayment, loan, amortization, etc.

How Does Credit Karma Make Money?

how does credit karma make moneyHow does Credit Karma makes money if they don’t charge you for their service? It’s a legit question. They have almost an identical business model to Mint.com. If you’ve signed up for Mint’s service, you’ll periodically get Mint partner offers that could potentially save you money. It’s a form of targeted advertising. Credit Karma has the exact same model: ad-based offers from partners.

You can elect whether or not you actually want to receive these offers right on the sign-up page under communication preferences (and you are even opted out by default). I appreciate that level of transparency.

Is Credit Karma Safe?

Any time you are dealing with your credit, you want to make sure your privacy is safe and secure. Is Credit Karma safe and secure? Yes – Credit Karma is extremely safe.

is-credit-karma-safeWith any credit service, you must be identified by your Social Security number. With some new account registrations, you may only need to use the last 4 digits (see image). Others required the full 9 digits, if your records are harder to find. Either way, this is only for first time retrieval – and your Social Security number is not stored on their servers.

To keep your privacy safe, Credit Karma also boasts the following privacy, safety, and security measures:

  • Credit Karma uses 128-bit encryption to secure the transmission of information (note the “https” in the address bar).
  • Independently certified by digicert
  • Credit Karma will not sell or rent your personal information to third parties for any purpose.
  • Accounts are read only – you can’t execute transactions. And there is no credit card information entered.

Is Credit Karma a Scam?

Before signing up, I wondered “Is Credit Karma a scam?”. But, after researching and using them for many years, I can tell you Credit Karma is not a scam. They are a legit company with a legit business model that has been around for years now.

is-credit-karma-a-scamCredit Karma is a digicert certified company. And through BBB (Better Business Bureau), they have a strong history of responses and complaint resolutions to customers. That is reassuring.

Power in numbers is reassuring as well. Credit Karma surpassed 75 million members in 2017.

I’ve never once been charged, never once had my identity stolen, or had any complaints of any kind in the years I have used Credit Karma.

How Accurate is your Credit Karma Score?

A lot of people want to know if the scores you receive from Credit Karma are accurate. By “accurate”, I’m assuming they want to compare the Credit Karma credit scores to a FICO score (which is commonly used by lenders to judge your credit). I crosschecked. Your experience may vary, the but scores that I have received from TransUnion and Equifax through Credit Karma are usually within a handful of points of my FICO score. That’s less than a 1% spread – which is basically no difference when you are judged for a credit approval. The credit rating companies have gone out of their way to have similar rating models, and FICO uses TransUnion, Equifax, and Experian data to calculate their scores.

Credit Karma Review: Final Thoughts

Any honest Credit Karma review will talk about the cons. The only Credit Karma con I have is that there are a lot of offers in the interface when you log in to your account. It’s a minor annoyance, but this is how Credit Karma makes money, so I’ll take that trade-off vs. having to pay for the service. You are under no obligation to sign up for any offers.

All-in-all, Credit Karma is a super useful service that I think everyone should have in their financial arsenal. You’re basically getting for free what many other services like Equifax, TransUnion, and Experian are charging $15 or more per month for. And having used other credit score reporting service in the past, the nice graphical interfaces, report card, and Simulator tool make Credit Karma much more useful. I highly recommended their service to anyone and score it as a 5 out of 5 stars. Please share your Credit Karma review below.

Get a free Credit Karma account here.

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