Earlier we discussed how I first found out about Credit Karma and how, as a seasoned financial professional, I was inclined to think that Credit Karma is a scam offer for free credit scores. I decided to do a review after being asked about it repeatedly.
Update: Read here about an opt-in service Credit Karma review credit monitoring as a free additional service.
There are multiple reasons for thinking this service isn’t legitimate, but the main one is that credit scores are not free.
Credit scores are not free for you, they are not free for banks, they are not free for car dealers, they are not free for anyone. Credit scores are the “why didn’t I think of that” invention of the century where personal lending is concerned.
A company called Fair Isaacs takes information from the credit reports at any of the three major credit bureaus and then uses a proprietary algorithm to reduce dozens of pages or more into one single number called a credit score. It does not do this for free. Every time someone pulls your credit score, they pay. They may pay a lot or they may pay a little depending upon their agreement with Fair Issac, but they do pay. You can’t give something that costs you money for free unless you have another way to make more money than you are paying out.
Credit Karma Review of Free Credit Score
Since most free credit score scams are actually free trial offers that lead to an automatic recurring charge on your credit card, I figured that Credit Karma would want a credit card number before giving me my credit score. I know how to beat automatic charges on my credit cards, so I thought I would go through the process anyway and find out for sure whether or not Credit Karma was a scam.
The surprising thing was that they never asked me to enter a credit card number!
As you may recall, I had generated a limited use credit card number to enter, but I didn’t need it. Credit Karma asked for a lot of personal information, but never asked me to enter a credit card number nor any bank account information. In other words, they have no way to charge me for my credit score. It’s tough to scam someone when you don’t get any money from them.
That begs the question, is the credit score from Credit-Karma a real credit score?
Another credit score offering out there are calculators that “estimate” your credit score for you. The catch is that they estimate your credit score based upon the information that you provide. Chances are that there is no way you are going to enter all of the information that exists in your credit report, so it is not a very accurate estimate, no matter how good the credit score calculator program itself is.
That didn’t happen with CreditKarma.com either. Instead of asking me for my financial account information, they asked me for the same type of personal information anyone would need to pull a credit report and get a credit score on me. This does include your social security number and there is no way around that, so at a certain level, you have to trust that the Credit Karma website is legit. So far, I haven’t heard of any rumblings that this is all a very elaborate identity theft scam, although that is no guarantee of anything.
Credit Karma Complaints
The number one CreditKarma complaint is that the credit score is not a real FICO score. However, it is based upon your actual credit report data.
As it turns out, I was buying my car off of its expiring lease when I discovered Credit Karma, so I was able to compare the score CreditKarma.com said I had with the one my auto broker pulled in order to do my car loan paper work. The scores were close enough to be considered identical. (Scores actually very depending upon which credit bureau is used and even from day to day depending upon new information being reporting and aging of old information, but in this case they were within 4 points of each other.)
Now what would make Credit Karma the must have personal finance service for financially savvy people is that it does not just offer you your credit score for free once, but says that you can come back and update it as often as you like. I don’t know if there is a limit on how many times you can update, but I updated my free credit score from Credit Karma every month since May with no complaints.
In other words, I have gotten six free credit scores from CreditKarma.com without paying a cent, without buying anything, and without clicking on any advertisements. There are advertisements on the page, but unless they are the kind that pay just for showing up, they have earned nothing from me other than thanks and this review.
I recently setup an account for my wife (spouses can have very different credit scores even if “everything” is held jointly) and have started getting her free credit score as well.
I can’t say that I expect Credit Karma to be in business long. I doubt that it can earn enough money on what it is doing to make a profit. It might even get shut down by Fair Issac somehow since they don’t want people thinking of its flagship product as “free”. If Credit Karma does succeed, then it won’t be long before copycats are all over the Internet. But, no matter how it turns out down the road, for now, Credit Karma is a great deal for people managing their money.
Related posts:
- Credit Karma Review Free Credit Monitoring
- Is Refurbished or Remanufactured a Good Deal?
- Credit Karma Accuracy
Tags: Credit Cards, credit karma, credit reports, credit score, free credit scores, Reviews
i signed up on credit Karma and they said my file was too thin
27 days later i got a letter from a collection svc about a 19 yr credit card debt
so they had to have sold my info
I have been using creditkarma since 2010 and update every month and have never had a problem
[...] a review of Credit Kama here on FinanceGourmet, a reader asked if I would look into another service he had found called [...]
Credit Karma only gives you your TransUnion Score????
Credit Karma gives you a score based upon your TransUnion credit report. All credit scores, even those your bank pulls when you apply for a loan, are based upon ONE credit report.
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Even though I am 46 but have never used a credit card, never borrowed money, never owned a home or a new car, never went to college and have never taken out loans etc., I signed up with credit karma just to see if it gave me a credit score at all. After I filled out everything I had a credit score of 745 or something like that. I think they came up with that score by using the home address where I am currently renting a bedroom, and they also used the cars associated with the home owner, not me. So this was not a accurate score in my case since I am not the home owner.
The scores are computed from your own credit report which is tied to your Social Security number, so someone else’s cars and the like won’t help / hurt. Don’t forget, bank accounts (even check and savings accounts) and your rental history can end up on your credit report, as can on-time payments of utility bills, cell phone bills, medical bills and others. Even in the unlikely case that you have never done anything that was reported to your credit report, that still means you have no late payments, your debt to income ratio is very high, and so on, all of which would add up to a good score.
[...] about this CreditKarma.com free credit monitoring review along with your free credit score. See my CreditKarma.com review for a complete look of Credit Karma. Also check this if you are worried about the whole thing being [...]
The Government, Federal Trade Commission (FTC),requires each of the three credit agencies; Equifax, Experian, and TransUnion to provide one free credit report annually. The FTC site is;
http://www.ftc.gov/bcp/edu/pub.....cre34.shtm
They send you to this site;
https://www.annualcreditreport.com/cra/index.jsp
So, you don’t need to go through these other agencies, you can get three reports legally free. And I think if you request one from each one separately, you can check out your credit 3 times a year.
You are correct. You can get your credit REPORT for free once per year from each of the three agencies. There is no requirement to offer a free credit SCORE, and none of the three credit bureaus do. In fact, they’ll try and sell you a “free credit score” that is actually an auto-renewing trial membership in their overpriced credit monitoring service.
I am very pleased with Credit Karma. I first heard about it last year from one of the financial websites I am subscribed to. If not for that endorsement, I would have been leary of trying it. They actually remind you to update your credit score if you have not for a while. I just updated mine today. I totally trust them.
I was going to try it but after looking around im thinking no. if creditkarma.com is owned by transunion like the author claims i find it odd the registrar is Go Daddy.com and not CSC CORPORATE DOMAINS, INC. like it is for for transunion..maybe nothing to it but it bothers me.
I think you might not understand what a registrar is. GoDaddy.com is a domain name registrar. You buy domain names through them. Everyone has to buy a domain name from a registrar, even big companies. I think I got FinanceGourmet.com from 1and1.com but they don’t have anything to do with the site other than hosting the name. Likewise, CSC Corporate Domains has nothing to do with TransUnion other than being who they bought the domain name from.
You’ll find lots of domains with a GoDaddy registrar. They are one of the biggest and the cheapest, although I wouldn’t recommend them.
I’ve been using credit karma since Jun 2009 without a problem. I think they make a significant amount of money by advertising for credit card and loan companies. It is a win/win for you and the banks. The banks are always going to make money off of you, but credit karma does help you wade through large amounts of financial data. I could figure out what credit card would give me the best rewards based on the type of spending I do.
I think they make their money on referral fees from the credit cards they recommend for you…just like airlines do. It’s lucrative, and it works, but it’s a good deal for the consumer too, since you have no obligations.
It all looks good and well, and everybody knows that there is a “BUT coming here.
They do not want your credit card info. But they do have all of the other pertinent information needed to steal your Identity. Not saying that is what is up.
But now they have your SS#, address, phone numbers, Spouses name and chances are some next of kin names and numbers. Everything needed to apply for credit cards, auto loans and mortgages. What is to say this is not the grand scheme of things. Just asking? I do hope this all legit. I sure could use a way to monitor my credit score.
Credit Karma is owned by Transunion, one of the three major credit reporting bureaus. They already have all that information and more. They use those fields to to match you to your credit record and, probably, update any information you have on file already.
The form never asks for your entire SSN, ONLY the last 4.
I signed up for Credit Karma in Dec last year, since then I’ve paid off over half my credit card debt but Credit Karma is still showing the old debt level with no change in my score since I first signed up, so my question is do they really update your score frequently or is more like once every six months or some other long time period?
I found the problem: you have to actually click on the Update button to get a new reading on your score and data.
Yeah, the update button is right there, but with all of that stuff on the page it’s easy to miss it.
I checked my credit score in creditkarma.com it gave me a hight credit score than, myfico.com.
I want to know why,or which one is true?
First, the credit score from creditkarma.com is computed by Credit Karma using data from your credit report. It is modeled on the FICO score, but is not a FICO score. The score from myfico.com is theoretically the more “real” score, however, scores are snapshots of a single point in time. It will be higher or lower tomorrow depending on if anything new gets reported to the credit bureaus. Second, even the score from MyFico may not be the “real” score depending upon which one of the several types of FICO scores a lender chooses to use.
There is a lawsuit brewing around just this issue. So many people are paying to see “their credit score” and actually have no idea what they are being shown, nor are those who sell the access making it clear what they are showing.
For now, don’t focus on what the score is, focus on whether it is going up or down. Whether you have a 720 or a 730 is only important when you actually apply for credit. However, if your credit score (whichever one you are looking at) goes from 730 to 710, you need to find out why and, if possible, undo it.
ok. The paranoia level seems a bit out of control here. I have been using CreditKarma.com for years now with no perceptible spike in credit offers or financial spam. Just great free B.S. free credit reports. I am glad to see some other people digging into the legalese as yes I was wary at first only because of all of the predatory companies out there that have offered me free credit reports before. The big companies Equifax/Experian etc are the worst! Talk about a scam? Free credit report.com SCAMMMM. Between amazing services like Mint.com and creditkarma.com and having an amazing bank like INGdirect.com Things are going pretty well. I LOVE ING!!! One thing the obama administration hit out of the park were these credit card reforms. I noticed (evil)bankofamerica has a class action lawsuit on their hands right now for ripping people off to the tune of several billion dollars by luring people in with a 0% rate and then at the first late payment jacking them up to 36% interest rate like they did to me. That is my last credit card mar on my credit score and I cant wait to start paying it own over the next year. BOA you bunch of THUGS. Im paying 16.8% on 5000 and probably have paid 5000 to get a 5000 loan from you turkeys. God I hope you guys in the credit division crash and burn. I hope the building you are sitting at there in Charlotte NC has faulty plumbing and the sewage backs up so high you are all up to your noses! ok ok rant over.
creditkarma.com seems ok to me.
and p.s.
social media managers are typically young internet savvy people who work on a contract basis for different companies. They usually aren’t corporate robots like you DON. chill out. Her picture is fine… is she supposed to be wearing a Hillary Clinton style pantsuit to make you happy? Go get a massage and loosen up a little.
I have used credit karma for over a year now, and I never have had any problems with them. I found out about them through a company called TransCard, which I got my bosses to use them for petty cash instead of Wester Union. Credit Karma has never sent me any spam emails and I have never received any phone calls on any phone in the house or cell phone from them, though the funny thing is that I get phone calls of people trying to sell me credit monitoring services for Discover Card and Citi bank.
Overall, I use Credit Karma and it has helped me to build my credit. I got it after I got my first card and following its tips I have increased by score alot.
Thanks for sharing your experience. I’m glad that it is working out for you.
I have been using Credit Karma for over two years and have had no problems. The information they provide is legitimate and the tools they have to help you improve your credit score are invaluable. Yes they are ad supported and make money by offering you ways to improve your scores through signing up for additional credit cards, insurance carriers and even banks. It works more like affiliate marketing. But the basic service is FREE and available without the use of any credit card you may have now.
I read your article carefully before signing up for Credit Karma. But, I also checked them out with the BBB (they are a member). Their BBB score is A-. If people feel they are being “scammed” by this web site then I suggest a complaint to the BBB.
Mitch
I think they share your credit score with companys that solicit you about financial offers. A company called my cell phone the day after I tried the service. It realy dosent bother me because I did read all of the disclosures and in them it said they would share my info with theyre “Partners”.
The day after signing up is probably too fast to attribute it to signing up. It takes a bit longer to package a phone list and sell it and then for those who use the lists to call the numbers on it. I’m not saying it can’t happen, I’m just saying that would be VERY fast for something like that to happen.
You gave them your name address, birthdate, phone number and SSN?nTo someone you don’t know? Now you act like a spokesman for them. The truth is that you have no idea how they may eventually use that very private information. Just because they haven’t used it yet for identity theft or anothermscam is no guarantee they won’t in the future. No one should EVER give out that kind of information to any person or site you don’t know well.
And as an aside, the response from “Justine” the “social media manager” disturbs me as much. No professional company would ever allow an executive to send out a picture like that. I realize its “social media” but its still a business!
I used something and it worked out, so I told people about it. I would prefer people do something like this instead of signing up for a “free” credit score only to end up on the hook for a $10+ per month credit monitoring service that they don’t want or need. I’m not sure how that is acting like a spokesman.
I’m not sure what your criteria for giving out your information is, but my name, address, and phone number go out to anyone who ships something to my house. My birthday isn’t much of a secret, either. I am very careful about who I give my SSN out to, but the fact is that it is impossible for anyone to get a credit report (and thus a credit score) without a social security number. There is no way around it.
I say SCAM!!! I entered all my pertinent information (Name, Address, SS#, Phone #) which hasn’t changed in the last (30)
THIRTY years, have only had ONE SS# and am 74 years of age.
By their standards “UNABLE TO VERIFY INFORMATION” after they have ALL my information.
Now I have to call all three Credit B’s and put a FRAUD warning on.
[...] is no one “real” credit score.How Do I Get My Real Credit Score For Free?In a recent review of CreditKarma.com we showed you how to get your credit score for free. As far as I know, Credit Karma is the only way [...]
signed up but cant verify the link in my email to log on thanks jerry
If you mean at Credit Karma, you’ve got the wrong place.
If you mean here at Finance Gourmet, looks like you are commenting just fine
This website creditsuit.org/credit.php/blog/creditkarma_another_scam_stay_away_from_lying_thugs/
has the truth about CK:
Not until you sign up, do you get the term where they hide in many pages of legalese:
At the time that you submit your registration form to us for a free credit score, you will automatically be enrolled to receive periodic valuable offers for products and services from our Partners.
And:
Our Partners
Credit Karma shows personalized offers based on consumer credit profiles. These offers are from partners and advertisers who share our vision of consumer empowerment. The premise of our service is to provide value to both consumers and advertisers equally by using advertising revenue to subsidize the cost of credit scores, and then matching offers to users appropriately based on their credit profile.
“These offers are from partners and advertisers who share our vision of consumer empowerment. “
Bob,
Thank your for your comment.
First, the Terms of Use are available at the bottom of the home page just like they are on most websites. There is no requirement for you to sign up before you can see them. You can view them at any time without logging in or creating an account. Or, you can use this link.
Second, it is pretty clear that Credit Karma is advertising supported and I made note of that fact in my review. I see plenty of ads on the site. Whether or not they will ever send some sort of email offer, I can’t say, but I haven’t gotten anything from them or their partners other than an approximately monthly email that says “my credit score may have changed”. I also have not gotten anything in the mail that is different than the standard stuff I get.
The text you quoted could use some context. The very next sentence after the first quote you cite is, “As set forth in more detail in our privacy policy, we will not share your credit report and score with our Partners.” I think that is a pretty important piece of information to get left out. In fact, the Terms of Use go hand in hand with most website’s privacy policy so that would be worth reading as well. (Again, there is no need to sign up before viewing.)
More importantly is the fact that while that author has chosen to play up these “privacy issues” these terms are virtually identical to many commonly used online services including Mint.com and even Google and their advertising programs.
In other words, yes, you will see ads on Credit Karma but you will get free access to your real credit score on an ongoing basis. I am willing to let them throw some ads up on my computer screen in exchange.
[...] Is Credit Karma A Scam Free Credit Score Offer? Finance Gourmet answers a big resounding yes; Credit Karma is absolutely, 100% scam-free! [...]
Hello!
Just wanted to drop by and say thank you for spreading the good word about Credit Karma.
I totally understand your skepticism about the possibility of a free credit score, but I’m glad that Credit Karma convinced you that it is possible to get your credit score for free anytime and as often as you like. In our office, we think that is a consumer right and a way to empower yourself to build healthier credit on your own!
If you have any questions or feedback, please feel free to email me.
We hope your readers will share your enthusiasm about our free credit scores.
Also, just as a side note, you don’t have to worry about Credit Karma going out of business. We will be around for a long long time, and will ALWAYS provide free credit scores with no plans whatsoever to ever, ever charge you. =) Thanks again.
Cheers,
Justine
Social Media Manager
Credit Karma