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Credit Karma Review

Posted By Jim On 06/29/2009 @ 12:05 pm In Credit | 155 Comments

I can’t believe I’ve been using Credit Karma [3] all these months and never wrote up a quick review of the service! I’ve done walkthroughs of their Credit Score Report Card [4], 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 [5]. 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 [6], 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 [7], 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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URLs in this post:

[1] Tweet: http://twitter.com/share

[2] Email: mailto:?subject=http://www.bargaineering.com/articles/credit-karma-review.html

[3] I can’t believe I’ve been using Credit Karma: http://www.bargaineering.com/articles/r/creditkarma.php?tag=CKreview

[4] Credit Score Report Card: http://www.bargaineering.com/articles/credit-karma.html

[5] do it yourself identity theft protection: http://www.bargaineering.com/articles/do-it-yourself-identity-theft-protection.html

[6] AnnualCreditReport.com: http://www.AnnualCreditReport.com

[7] FICO credit score: http://www.bargaineering.com/articles/free-fico-credit-score.html

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