A Credit Karma Review: Get your free Credit Karma Score Today!
Whenever you intend to improve your credit, or just need to know your current standing, you need the help of reliable credit score sites that offer credit rating information.
If you intend to apply for a travel credit card or a business loan, your credit score will determine if your application gets approved or rejected. This Credit Karma review will help you find out how you can get a free credit score for life and make your life easier.
What is Credit Karma?
This is an online service that is designed to offer a monthly credit score for free. They also offer other services for free like credit monitoring, preparation for state income tax, credit card and loan recommendation.
Credit card recommendation refers to the way Credit Karma finances the whole operation. Credit Karma merges your credit rating with credit cards that usually accept applicants with the same score. Once you apply via Credit Karma, they get a small percentage as commission.
However, it is not a must that you apply for a credit card for you to use Credit Karma. The majority of people sign up for the service to benefit from the free credit rating and credit monitoring benefits.
See Your Credit Score for Free
The key advantage of this service is that it offers you a chance see your credit rating for free. It is one of the pioneer online services to provide this free benefit and for this reason, they are the leading online platforms currently. Additionally, they do an excellent job marketing via TV ads.
The platform offers you a VantageScore 3.0 that is created by the three leading credit bureaus including the Equifax, Experian, and TransUnion as a substitute to the FICO scoring model. Many creditors prefer using the FICO credit score to VantageScore, even though the latter is the same and they offer you a perfect idea of what your FICO score will be.
Every time you log in to Credit Karma, your score from Experian and TransUnion will update automatically.
Free Credit Monitoring
Credit monitoring goes together with a free credit score. Because Credit Karma can access your credit history to offer your credit rating, they will send you alerts in case they suspect unusual activity. For instance, they send a notification once the credit bureaus report the hard inquiry when applying for a mortgage loan, auto loan or new credit card. When your application is accepted, the credit karma will notify you are affirming a new credit account has been opened under your name.
This is a simple approach to monitor your credit rating for possible fraud. Since the data breaches are frequently hitting the news headlines, free credit monitoring that that alerts you from various credit bureaus is something to consider.
Filing tax for free
Filing tax for free is the newest feature of Credit Karma that was launched for the Tax Year 2016 filing period in 2017. Many people benefited from the free federal and state revenue tax services from Credit Karma. The online systems files almost all tax return without charging anything.
Credit Karma Tax may not be as a user-friendly as the paid services such as TurboTax or H&R Block that offer professional advice and automatic data imports, but it’s unpaid. If you don’t use any extra premium features anyhow, taking some additional time to input all your data manually could be worth the savings. Additionally, it is faster and convenient than using a pen and paper.
Recommendations for Credit Cards and Loans
While many individuals use Credit Karma on a daily basis for the free score and monitoring, the online system has their bills to cater for so they can continue offering these services without charging anything. They generate their income via credit card and loan applications.
Credit Karma provides a list of recommendations based on your current credit ratings, odds of approval, and the cash they generate for every single application. With a credit rating of 800, you can expect to get a recommendation for Blue Cash Everyday card issued by American Express, Citi Double Cash and also the Cash Sapphire Preferred.
Credit Card User Reviews
On top of Credit Karma that shows you the odds of approval, user reviews are also extremely valuable. The reviews have valuable details that include how individuals get rewards, redeem their rewards, and their experience with customer support. A review must include the credit rating of the applicant. Note that the user review may be more important than the odds of approval measure since every application is different. No two individual have the same credit rating, even though their scores may be the same.
Credit Karma provides loan recommendation for various types of loans such as personal loan, home loan, student loan, car loan and business loan. To get a quote, you will need to provide personal details such as revenue, age, and employment details. This is more convenient than going to the local financial institution to submit your loan application. This is also the best way to compare interest rates.
Advantages of Credit Karma
- Free lifetime credit rating and credit monitoring
- You don’t have to apply for a loan or credit card to benefit from the free services
- Free federal and state preparation of tax
Drawbacks of Credit Karma
- You get a vantage score and not the FICO score
- You can’t access your actual credit history
How does Credit Karma make money?
How does Credit Karma manage to offer a free credit score while other platforms charge a monthly fee of $20 or even more?
The online platform generates its income through TV advertising. Mostly, they focus on targeted advertising based on your financial behaviors. For instance, if you have good credit, financial institutions are ready to pay lots for advertising to target you with the best loans and credit card since it is less costly for them over advertising their ads to many individuals who may not even qualify for the loans.
If there is a catch to Credit Karma, it is that they are using your credit information to advertise to you.
While Credit Karma allows you to use its services for free, you must present your personal information for the service to work. Since you don’t need to have a credit card, there are no fees charged. You must have an email address, and you must be able to receive email updates concerning your credit history and important alerts relevant to your credit profile.
You also need to insert your personal contact details like address, phone number, date of birth, last four digits of your social security number and your yearly income from the drop-down selection. Lastly, you are required to authenticate your ID by responding to multiple choice questions like “which of these phone contacts have you never used?” or selecting the name of the financial institution that gave you a loan. Once you sign up, you allow Credit Karma to remove your credit history from Equifax and TransUnion.
Credit Karma receives the details you give. Then they use the information to serve you highly targeted publicity. For instance, Credit Karma knows that you are using a credit card with a balance, knows interest rate that you are required to pay or if you are charged late fees. Credit Karma will use the info to show you an advert for credit cards that have better deals for individuals who transfer balances.
Security and Privacy
Credit Karma claims that its rights are reserved such that it can use your details to comply with summonses and federal request at any moment without prior notice.
How Does Credit Karma Work?
Credit Karma has established a strong relationship with numerous credit bureaus. While no one will disclose any information about the partnership, Credit Karma will take your credit reports and credit rating from them. Credit Karma pulls the credit history and rating once every week.
The pulls will not hurt your credit score since they are soft inquiries and not the hard ones. Lending institutions such as banks and credit union firms are known to make hard inquiries when they want to decide if to accept or decline your loan application. Other parties will make soft inquiries without your knowledge. For instance, a soft inquiry is made when a lending company pre-approves you for a loan.
Understand Your Credit
Credit Karma gives you a convenient and quicker approach to review credit history and get a clear understanding of your credit rating. You also have a chance to learn more about the things that can hurt your credit history. If that is all you need, credit karma is the best tool to use. This is the most secure service to use. Even though they will use your personal details to serve ads, they don’t share it with other parties.
Note that your credit rating plays a significant role in your financial well-being. Therefore, it is imperative to have a clear understanding of your credit rating and pay attention to how it changes over time.
While many services will charge you $15-20 to check your credit rating, Credit Karma allows you to view and track your score without having you leave your credit card details and free trials.
How Accurate is a Credit Karma Score?
While the credit rating you get from Credit Karma is pulled from three credit bureaus, they are not FICO score and the scoring model used by numerous creditors. Whereas the three credit bureaus developed VantageScore 3, it is not that common as the FICO model. When applying for a loan, it is likely that your FICO score will not be the same as the scores you have been tracking via Credit Karma.
You can’t tell how huge the difference may be, and the member’s history will vary. Many users claim that their scores from Credit Karma are somehow lower than their FICOs, and this makes them wonder if the site purposefully gives lower scores to make their clients come back.
Other people have expressed their disappointment the moment they realize that their FICO rating is lower, and they don’t qualify for as competitive rates as they expected.
Again, others claim that both their FICO and Credit Karma ratings had insignificant differences.
Credit Karma Complaints
One of the most common complaints filed against Credit Karma is that the credit rating is not a real FICO rating. Instead, it is a Vantage 3 credit score. Nevertheless, the credit score is obtained based on the actual credit report details, so it is critical to monitor whether your score is increasing or reducing.
The current BBB rating of Credit Karma is B- and this is because there are 390 complaints submitted in the last three years. Nevertheless, with over 60 million users, this is just a drop in the ocean. And the company is striving to resolve most of the complaints. Credit Karma has also been issued with action from the FTC in 2014 for security risks in its mobile application, but those matters have since been resolved.
Is Credit Karma A Scam or Legit Free Credit Scores?
The idea of receiving free credit scores has been taken advantage of by scammers repeatedly. The most worrying part is that many of these scams are enacted by renowned firms and by credit reporting bureaus.
This is how the free credit score scam is perpetrated. An organization agrees to provide a free credit score, and you must sign up to get the free score. If you ignore their terms and condition, you may think that you really get a free credit score by signing up. In fact, you are signing up for the free trial membership in the credit monitoring service of the company.
They will give you a free trial that will last for either one month or three months, but once the free trial ends, you are automatically subscribed to the paid plan. This is why you are required to insert your credit number when signing up. If they tried to charge once the free trial has ended, every person would decline. They will automatically deduct the amount from the credit card.
In most cases, they bill annually in advance such that by the time the amount is reflected on your credit card bill, it will be already late for you to ask for a refund.
Another discouraging thing is that they will automatically renew your subscription once it expires, so one year later when you don’t remember anything about signing up.
Free Credit Report from Credit Karma Scam Too?
Understanding how free Credit Karma score works and how credit repair scam operates will help you know if a website is legit or not. According to numerous positive reviews from clients, Credit Karma is not a scam. They are a legitimate firm that uses a legit business model that has been in existence for many years. The service provider is a DigiCert approved company, and with the help of the Better Business Bureau (BBB), they have the best approach to solve complaints from their clients. Credit Karma is the leading website that offers free credit score and monitoring with more than 60 million members. It does not overcharge its clients, or no one has ever complained that his or her identity has been stolen.
Is Credit Karma Safe? A Closer Look At Security
You have the power to decide if you want to trust a specific website with your financial information comfortably. However, it is essential to know both the good and the bad of about Credit Karma’s security so that you can make an informed decision. Let’s start with the bad since this is where the blunder resides.
The bad news
Some years ago, the Federal Trade Commission-imposed charges against credit karma. This is because of misrepresentation of the security standards of its mobile app and failing to implement a reasonable action plan to safeguard the personal information of the user. Credit Karma and FTC settled the issue in 2014. However, those problems might indicate a habit that is susceptible to the future security breakdowns.
The good news
- Lawfully mandated security reviews. The best part about Credit Karma’s engagement with the FTC is that it will undergo independent security assessment almost every year.
- Offer bank-level encryption standards. The site uses an “https” that has 128-bit encryption. This is to say that any data transmitted over the website is protected in a way that it’s hard to hack the existing computing power.
- Offer Identity verification. New users are required to properly answer some questions concerning specific details of the financial history to sign up for the account and get a free credit rating. This makes it impossible for a different person to access your credit data.
- Has a read-only access. No one can alter the details of your credit history or steal cash from your account, not even Credit Karma.
Pros and cons of using Credit Karma
Knowing the pros and cons of Credit Karma is important since you will know how to use it to your advantage.
It is free
When you try to do a google search on free credit scores, you will come across numerous scams and low quality service providers. Getting a legitimate free credit score website like Credit Karma is not an easy task. Some website will entice unsuspecting clients with free credit history, obtaining their financial details and then charging them immediately an arbitrary fee once the free trial period has ended. On the other hand, Credit Karma has created a name for itself by taking a different approach. Clients are not asked to enter their credit card information and the platform doesn’t charge any fee for its services.
Generates income via legal advertising
The moment a company advertises its services as free, many people will start questing how they make their money. Credit Karma generates its income by selling ads on its websites. Once a user logs in to his or her Credit Karma account, some recommended credit card offers and promotional deals will pop up. The platform generates a considerable commission once you sign up for the credit cards. On top of that, users will get frequent promotional emails from Credit Karma listings. You don’t have to click on the offers, and you can also unsubscribe from the advertising email.
Credit Karma is designed to use the HTTPS protection and OpenSSL encryption on its site to offer a superior level of security. All the details that passes between the account holder and the credit karma server are protected during the whole transferring process.
Unlike other service providers, Credit Karma provides a complete listing of the top apps that are available for iPod Touch, iPad, iPhone, and Android. The applications are top rated in their respective app stores and they offer convenient and fast access to their account. Once you download the app, create a new account in-app. Some new features of the app include the capability to dispute inaccurate credit report details instantly from the credit karma app.
You don’t have to enter your credit card details
Some free credit score companies will need you to provide credit card data even when they claim that the services are free. In most cases, they aim to deduct some fees the moment the free trial ends. This is a deceptive way of conducting business. Luckily, Credit Karma uses a different approach that doesn’t need its users to provide credit card information during the signing up process. You don’t have to pay anything for their services.
Easy UI and Clear Display of Data
It is not a must for you to be a financial professional to interpret Credit Karma’s information. This is because every detail is clearly outlined in your account. You will understand what is being displayed. If you are among the lazy people who have never checked their credit history, Credit Karma will take you through as they explain what every aspect means and what hurts your credit rating. Even though Credit Karma uses a basic UI, users can still view detailed credit report information. Every data concerning your credit is accessible, including the total number of accounts, the balance on all loans and lines of credit, and other aspects available in your credit rating.
Advanced Credit Tools
Credit Karma does not come with numerous features like the paid websites. However, that does not stop it from offering a couple of helpful credit reporting tools. The tools include a simulator that allows you to tinker with your credit rating using different methods. A simulator will help you see the extent of how that failed auto loan payment will affect your credit score. It will also help you find out the period it will take you to improve your credit rating. Additionally, if you are new to credit monitoring, it is good to use the stimulator before making any credit decisions.
Receive Credit Alerts
Credit Karma is also designed to offer other services like credit monitoring. They will send you an email alert whenever your line of credit is about to hit its limit. Credit Karma will also inform you of any potential issues with your account. For instance, if your account was terminated, they will send you a notification.
Detailed Credit Report Cards
Credit Karma comes with a credit report card that offers detailed data regarding your credit score and credit information. The details include all unsettled debts and lines of credit, the amount by which debts have increased or reduced from the time it was updated last. Additionally, they will grade your credit history to help you to know where you need to improve and what factors are pulling you down.
The cons Credit Karma
Limited Credit Monitoring
As Credit Karma is a free credit reporting service, it offers restricted credit monitoring features. The work of a credit monitoring service is to screen public database for any alterations made on your personal data. Credit Karma will be the best option if you don’t need these services. However, you can monitor your credit through manual means by checking karma regularly for your credit report and screening that history for any changes.
No FICO Scores
You cannot obtain a FICO score from Credit Karma. FICO score is important since it will help your creditors to define your worthiness as a debtor. This is the most significant number that is associated with your credit. Nevertheless, Credit Karma uses its own metric known as FAKO score. This number is an estimation of your FICO score and the two figures might not be the same.
Credit Karma offers its services for free because they generate income from advertising offers with credit card firms. If you are someone who doesn’t like getting promotional emails and does not like being interrupted by ads on the website, then Credit Karma is not for you. However, you can avoid the promotional emails and get an ad blocker to stop the ads from showing up.
It is important to use a credit card site when it comes to tracking and analyzing your credit rating. This is because it will help you in the process of searching for a loan. Bear in mind that when looking for any type of loan, you must talk to multiple creditors and compare what they have on the table before you choose one.
Even though many lenders use a FICO score instead of Vantage 3 issued by Credit Karma, they still provide helpful services. Credit Karma offers reliable credit ratings that are delivered directly from the details furnished by the credit bureaus. For anyone who needs a free and reputable way of monitoring their credit rating, Credit Karma is the best option as it offers real-time updates and customized advice to assist you in improving your credit rating.