Credit Karma is 100% free, and you can get access to your credit scores and reports from two of the three major consumer credit bureaus, plus credit monitoring, insights, recommendations and more. Credit Karma Money Save is a high-yield savings account,1 with no fees and no minimum to open.
If there's a downside to Credit Karma, it's the fact that, yes, they're using your personal credit data to advertise to you. It's no different than Facebook using your likes to serve ads based on your interests. That said, I would agree that the financial data makes it a bit more personal.
A: Credit Karma is a legitimate company; however, for a variety of reasons, its scores may vary greatly from the number your lender will share with you when it checks your credit. We have answers to all your questions about Credit Karma.
Checking your free credit scores on Credit Karma doesn't hurt your credit. These credit score checks are known as soft inquiries, which don't affect your credit at all. Hard inquiries (also known as “hard pulls”) generally happen when a lender checks your credit while reviewing your application for a financial product.
Credit Karma offers free access to TransUnion and Equifax credit data, as well as offering tax preparation assistance, and other services. It makes money by receiving a fee every time a user purchases a product or service it recommends. Credit Karma is a fintech startup focusing on providing credit information.
But how accurate is Credit Karma? In some cases, as seen in an example below, Credit Karma may be off by 20 to 25 points.
Credit Karma is different from Experian. While Experian compiles your credit report and determines your credit score, Credit Karma simply shows you credit scores and report information from Equifax and TransUnion.
It usually takes about four to six weeks for lenders to report new information (like new balances or payment activity) to TransUnion, and the frequency of updates can vary by lender. So it can take up to seven weeks for any changes or new information to show on Credit Karma.
Why your Credit Karma credit score differs
Your score can then differ based on what bureau your credit report is pulled from since they don't all receive the same information about your credit accounts. Secondly, different credit score models (and versions) exist across the board.
For a score with a range between 300 and 850, a credit score of 700 or above is generally considered good. A score of 800 or above on the same range is considered to be excellent. Most consumers have credit scores that fall between 600 and 750.
Furthermore, even that information isn't stored permanently, so there's no risk of someone hacking in and stealing part of your social security number. Credit Karma doesn't sell or rent your information to any third parties, including your contact information and your credit information.
Credit Karma is always free. Credit Karma won't ask you for your credit card number during the registration process or at any other time. We don't ever sell your information. We do get paid through our partners if you get a product through one of our recommendations.
The score you see on Credit Karma is out of 710 and the brackets are as follows: Scores 565 and below are considered Needs Work. Scores between 566-603 are considered Fair. Scores between 604-627 are considered Good.
Credit Karma is not a bank. We partner with MVB Bank, Inc. to provide banking services supporting Credit Karma Money™ Spend and Credit Karma Money™ Save accounts.
Risk of Getting Into Debt
Any time you borrow money, you're creating debt. The more you borrow, without repaying, the deeper you go into debt. Debt leads to a myriad of other problems, and not all of them are financial. It can lead to stress, depression, and other health issues, all of which can have serious impacts.
Though Credit Karma does not currently offer FICO® scores, the scores you see on Credit Karma (VantageScore 3.0 credit scores from TransUnion and Equifax) provide valuable insight into your financial health. It's important to keep in mind that no one credit score is the end-all, be-all.
This is due to a variety of factors, such as the many different credit score brands, score variations and score generations in commercial use at any given time. These factors are likely to yield different credit scores, even if your credit reports are identical across the three credit bureaus—which is also unusual.
The most common reasons credit scores drop after paying off debt are a decrease in the average age of your accounts, a change in the types of credit you have, or an increase in your overall utilization. It's important to note, however, that credit score drops from paying off debt are usually temporary.
On AnnualCreditReport.com you are entitled to a free annual credit report from each of the three credit reporting agencies. These agencies include Equifax, Experian, and TransUnion.
If you've recently made a change, like opening or closing a line of credit, or paying down a credit card balance, your lender(s) may not have reported this information to the credit bureaus yet. You can check when the individual accounts were last reported with the bureau through Credit Karma.
In terms of providing information about your credit score and how you might improve it, the two sites are fairly comparable, though Credit Karma offers a superior user experience. It also contains scores and reports from two reporting agencies, NerdWallet is restricted to one: TransUnion.
FICO 8 scores range between 300 and 850. A FICO score of at least 700 is considered a good score. There are also industry-specific versions of credit scores that businesses use. For example, the FICO Bankcard Score 8 is the most widely used score when you apply for a new credit card or a credit-limit increase.
It's Best to Pay Your Credit Card Balance in Full Each Month
Leaving a balance will not help your credit scores—it will just cost you money in the form of interest. Carrying a high balance on your credit cards has a negative impact on scores because it increases your credit utilization ratio.