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Is Credit Karma a Scam?

Posted By Jim On 01/23/2012 @ 7:15 am In Credit | 430 Comments

You know the old maxim – if it sounds too good to be true, it probably is. Does Credit Karma [3] sound too good to be true? You can see your TransUnion credit score for free? You can get absolutely free credit monitoring? These are services that people pay good money for and Credit Karma, a company that isn’t affiliated with any of the credit bureaus, is giving it away for free. It does sound too good to be true.

That begs the question – is Credit Karma a Scam?

Is Credit Karma a Scam?

While you can never say so with 100% certainty, I don’t think they are a scam. I don’t think they are a scam because I understand the business model and you can make more money legitimately than illegitimately, plus they’ve been at it for a long time. While none of these are absolute indicators of them not being a scam, I’d find it difficult to believe that this is an elaborate ruse designed to steal personal information.

For more information about their service, here’s my Credit Karma review [4] and video walkthrough [5].

How does Credit Karma Make Money?

I don’t know for sure but my guess is that they make money when someone signs up for an offer on their site. When you visit the site, you’re frequently shown banking, credit card, and other financial offers that are probably better than whatever you’re using. When I logged in, I was shown an offer for the Citi Platinum Select MasterCard and estimates that I could save $342 over a year. Since I carry no balance, I know that savings estimate is wrong but for someone who does carry a balance, $342 is good savings. If I sign up, Credit Karma may be paid for that.

What About Other Free Credit Scores?

For almost every other free credit score [6] offer, you get your credit score in return for signing up for a credit monitoring membership service. That credit monitoring service comes with a monthly fee after the trial period and the company is betting that you’ll continue with the service, either by choice or because you forget to cancel. They aren’t scams because they tell you this up front but Credit Karma doesn’t sign you up for anything you will eventually pay for.

You will have to make your own determination as to whether Credit Karma is a scam. I’ve been using them for over a year with great results, they’re the cornerstone of my do it yourself identity theft protection [7] system and it’s been working out so far.


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

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

[3] You know the old maxim – if it sounds too good to be true, it probably is. Does Credit Karma: http://www.bargaineering.com/articles/r/creditkarma.php?tag=CKreview

[4] Credit Karma review: http://www.bargaineering.com/articles/credit-karma-review.html

[5] video walkthrough: http://www.bargaineering.com/articles/credit-karma.html

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

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

Thank you for reading!