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Credit Karma Review
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I can’t believe I’ve been using Credit Karma all these months and never wrote up a quick review of the service! I’ve written reviews about their credit score report card, but never about the entire service. Tsk tsk, what a bad blogger I am.
Credit Karma offers a lot of nice juicy information but the only thing I’m really pumped about is the fact that you get your TransUnion credit score absolutely free. When you sign up, you have to provide a lot of sensitive personal information because it’s needed to pull your credit score from TransUnion. Since the service is free, the only barrier to using it is your comfort level with providing this information to a third party.
Here’s what my dashboard looked like:
There are several reasons why I like Credit Karma:
- It’s free. When other companies are charging you to look at your own credit score, it’s nice to be able to see it for free. You don’t have to provide a credit card number, there’s no “trial,” and there’s no sneaky catch in there. It’s free and they never ask for a penny. That’s very refreshing.
- Check as often as you want. Many of the trial services let you check your score once. After that, you need to pay. With Credit Karma, you can check it as often as you’d like. The real limit is once a month because that’s how often various creditors will report data. So you can check daily, but it won’t change unless your report changes.
- It helps protect against identity theft. Now that the barrier to see your score once a month (or daily if you prefer) has been reduce to $0, it’s possible to use this as part of your do it yourself identity theft protection. If someone opens an account with your credit and the account uses TransUnion to check your score, your score will inexplicably go down. While this doesn’t trump checking your report every year through AnnualCreditReport.com, the fact that it’s free makes it a no brainer for you to check at least once a month, rather than once every twelve.
- The credit simulator is fun to play with. If you’ve ever been confused about your credit, such as what can hurt or harm it, the credit simulator is a great intuitive way to learn how your actions affect your score. Open a new account? Score falls. Pay off a debt? Score rises.
Here are some reasons why I don’t like it:
- It’s not a FICO credit score. Credit Karma does not give you a FICO credit score, they give you a TransUnion credit score. TransUnion is one of the three credit bureaus, so it’s a score from a credit bureau; it’s just not one using the FICO credit score equation. If you’re planning on getting a loan, you’ll want a FICO score. If you just want to see what your score is, this score is good enough.
- It’s a security risk. Giving a third party your sensitive information, even if it is protected and secure, is always a risk. For me, the risk is acceptable but you have to make that determination for yourself. It’s just like the warning I give every time I write about personal finance tools like Mint or Quicken, you take a calculated risk whenever you give your sensitive financial and personal information to at third party. If something happens, ultimately you are responsible.
Overall, I’m very pleased with what they offer. If you’re wondering how they can offer this service for free, it’s because they’re supported by advertising revenue. One thing they have promised never to do is sell your personal information to third parties, which is always one of the concerns whenever you sign up for free services like this. Fortunately they’ve addressed it and put that issue to bed.
I know a lot of Bargaineering readers have signed up for Credit Karma, in part because everyone always gives them a shout in the comments, so I’m curious what you think about the service. If you have any recommendations of what they can or should do, please also share those as well.
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I checked out Credit Karma because you had mentioned it, and I like it. I haven’t been able to get my free credit reports in awhile, because the credit agencies want a bank statement/information I’m not willing to give to prove my identity. Since Credit Karma is a third party, they can at least get some information for me to view. Yes, I know that’s a bad thing that third parties can get your information much more easily than you can. I don’t mind giving Credit Karma the information they need, because it isn’t nearly as sensitive as what the credit bureaus want from me. I wish Credit Karma provided more services, like the ability to put a freeze on one’s credit bureau files. I took a trial of LifeLock, which didn’t get me my free reports but did put fraud alerts on my reports temporarily. In spite of this, I was shopping and offered a 15% discount for applying for a store credit card. I did not expect to get the credit card and only wanted the discount, but I did get the credit card. I was a bit surprised.
The TransRisk score that they use is way off. It is over 50 points different than my Transunion FICO. It might be a decent educational tool but I find it useless for real purposes. Also, that simulator is off as well. I simulated what would happen if I paid my bills on time for the next 24 months and my score went down!
I’ve been using Credit Karma for quite some time and love it. I know it’s not the FICO score but it still helps me gauge generally how I’m doing regarding my credit.
Unfortunately my credit score is not likely to rise too quickly. I paid off all my car loans and only have one credit card with no balance. My mortgage is my only debt which I try to make extra payments on whenever possible. While I know I’m doing fine financially, my Credit Karma score still hovers around 700 and I don’t expect it to skyrocket anytime soon.
Credit Karma is good enough for me, since I don’t need my “real” score for anything right now. I’m about to rent an apartment, so while it might be a good time for me to get my “real” FICO, I’m not sure what help it would do. I already check my credit reports three times a year, and my Credit Karma score every month, so I’m not sure what I would see in getting my FICO score that would help me in the event my new landlord does a credit check. If I was going after a car loan or a mortgage, maybe…
I don’t think you need to get a “real” FICO score just to rent an apartment, you already do enough to ensure your credit is good. Getting a real FICO would probably be a waste of your time.
I got my real FICO score to compare it to Credit Karma. They were within 10 points.
Works for me!
Great service to share with your readers, Jim!
I have been using Credit Karma for about 2 months. When i started using it i had gotten my FICO score a week earlier. Credit Karma shows my TransUnion score as being about 10 points lower than my FICO score. That is close enough for me. Looking at the Report Card feature shows me the areas that i can improve on (any that are not an A).
So, what’s a good score on Credit Karma?
It’s technically the same scale – What’s a Good Credit Score?
Well, if I can trust that the CK score is within around 10 points of the FICO score, then I’m in good shape. I guess I’d like a larger sample set to compare to though. Or, I could just get my FICO score and compare them myself.
I guess it just seemed a bit high to me, not that it’s a bad thing…
Does it affect your credit score negatively when you “update your score” on Credit Karma?
Wondering because of the prompt you receive when updating…
Nope, none of these consumer services do. They are soft pulls that do not effect the score at all and are not visible to creditors. The prompt is permission so that CreditKarma is allowed to go out and get sensitive information from Transunion.
I like CreditKarma, even more now that they’re using a real credit score rather than an estimation (even if it isn’t FICO). I check every few weeks, and even used it to see the effect of adding a applying for and accepting a new credit card — my score dropped by one point.
There is a danger in using a score that really isn’t used by any lenders and I think you described it right there. Dropping just a point for an inquiry and a new account? I have NEVER heard of that with FICO. It should drop a lot more.
So now a consumer like yourself walks away and can easily think, wow, I should apply for new cards all the time. Just a 1 point hit?
I just have experienced a lot of crazy volatility with this score. For example, it does not properly take into account no-preset spending cards so your score drops and that report card says your maxed out when you really are not. (it was simply the score looking at your high balance as your credit limit instead of looking to see it was an “OPEN” card and that it should not be used in utilization) which my FICO score properly deduced.
Then I have had instances where my score is higher that friends who have longer histories, with better characteristics, according to FICO!
Then there was the time I looked at my “Credit Snapshot” and it stated I should pay my bills on time more often, when I never paid my bills late ever!
Granted, Transunion is probably feeding this information to CreditKarma, my point just is that there is a danger that this product can cause more confusion when it’s not using a stable and commonly used score. It’s a great offering I just don’t trust the score.
If you ask me the entire fico thing is a bit of a sham. Here you have this private company with some secret formula basically wielding an enormous amount of power over everyone. At least the credit formula for arriving at your score should be simple and straight forward.
I don’t agree with the concept of an arbitrary score in the first place. You should have just a credit report. If you want a loan, an actual human being should look at your report and decide based on your actual history, ie facts, whether or not they feel you are a good credit risk. A score is just a way for them to say, oh, I am sorry because your score is only 680 you don’t get the good rate.
With this scoring system, you can pay all of your bills on time, never have an issue and still not have a very good score. What if you are moving along fine, and then one day, your credit cards drop your credit limit to your balance that you owe. Happening to people all over the country for no other reason than the creditor is contracting lines of credit. All of the sudden you can go from 750 down to 650 and it is something that you have no control over.
If there was no “Score” well then you would have to have an actual human (remember when corporations had Humans do things)look at your report, and they might have a question. Everything looks real good except please explain why you maxed out all of your credit cards. Oh, I didn’t I actually carried fairly small balances on them but last month a few of my creditors lowered my credit limit because of the financial crisis. Oh, ok that makes sense, here is your loan.
This entire secret score thing is bogus.
Just my two cents, anyone else agree?
Works for my purposes
Checked my score on Credit Karma is says 695. Purchased my TransUnion FICO score and it is 771. A big difference in the score. Thank goodness the FICO score is the real deal. I do like using Credit Karma. An increase in the CK score will lead me to assume my TU FICO score has rose without purchasing it. Maybe the CK score is just playing catchup if it increases.
The score CreditKarma gave me was 747. My real score from all three credit agencies is 801/807/797. So they are way off, but maybe that happens at the higherend of the scale.
I feel that I was tricked by free credit report to try a free service that they later charged to my credit card I will cancel my credit card for this reason and I will never trust your organization again .Trickery is the name of the game and your credit services are just like all the other money making scams to trick unsuspecting consumers out of their hard earned money no shortage of takers in this area. I hope God blesses people who exploit poor Americans out of their nickels and dimes with long life long enough for someone to nickel and dime them ,P.S. keep the 31.00 dollars apparently FREE CREDIT REPORT.COM needed it more than my children and I. sencerly il grayson TX
1) Nobody who knows their rear from a hole in the ground thinks freecreditreport.com is actually free. Why?
a)It’s on TV and says “free” over and over and
over. There’s your first clue. Real “free”
things don’t require arm twisting and
repetitive jingles to get their point across.
b)It’s run by Experian and Experian is
comprised wholly by soulless bastards.
2)This article is for something completely different, with nary a TV jingle repeating “free” over and over again.
3)As far as I’ve seen, this site has never pimped freecreditreport.com without warning you that there’s a fee attached if you don’t cancel during the free trial.
4)READ when you agree to things ESPECIALLY on the Internet. Good God, man.
I like the answer that says that Experian is a bunch of “bastards”– amen