Credit Karma made waves when it started offering free credit scores online. At first, many people, including me, were worried that the whole thing was just a big Credit Karma scam. However, after doing some research into whether Credit Karma is legit and even doing an in-depth CreditKarma.com review, I realized that while there may be some concerns over Credit Karma’s accuracy, there is nothing underhanded about the online financial service.
Credit Monitoring Scam
This year, Credit Karma is offering it’s registered users something new. They are expanding beyond their flagship service of offering to show users a free credit score and moving into to offering free credit report monitoring.
One of the biggest financial scams in America comes courtesy of the credit reporting industry and the three major credit reporting bureaus. In class Mafia-style extortion, a tough looking guy visits a local business. He says that bad things might happen to his business. In order to be safe, he should pay for “protection.” Of course, the only protection the business needs is from the crooks offering the protection. Credit reports and credit report monitoring work the same way.
The credit bureau’s extortion scheme works exactly the same way. You see, bad things might happen to your credit report. Someone might put false, damaging information in your file. The “smart” thing to do is to check your credit report often. To do that, you have to pay
your protection money for a credit monitoring service so that you can be informed when negative information goes on your credit report. Of course, the only thing you need “protection” from is the credit bureaus and their lackadaisical efforts to ensure that only accurate information is on your credit report. Not surprisingly, Transunion, Experian and Equifax all gladly offer high-priced credit monitoring protection.
Unfortunately, just like the Mafia, the credit bureaus aren’t satisfied with just extorting a one-time fee. Instead, they use every trick in the book to get
suckers customers to sign up for automatically renewing subscriptions that will charge your credit card or debit your bank account for life, all to “protect” you.
Free Credit Monitoring from CreditKarma.com
Credit Karma is offering it’s users a new option. Once signed up for Credit Karma, users can opt-in to a free credit report monitoring service. Every time negative information shows up on your credit report, Credit Karma will send an email alert. Unfortunately, at that point, the only thing you can do is order a copy of your credit report from the credit bureaus. If you are lucky, then you can get your government mandated free annual credit report.
If you already looked at in the past year, however, you will have to pay money in order to get your report, get bombarded with offers for free-trials that are actually auto-renewing subscriptions to expensive services, and then find the negative credit info in your report. Credit Karma has nothing to do with that part of the industry and it certainly isn’t their fault. Hopefully, the trend toward more accessible free credit information will continue. In the meantime, the credit industries high-paid lobbyists will ensure that other than that one free report each year, that you pay through the nose to keep financial companies from lying about you.
Fortunately, Credit Karma allows you the piece of mind of not having to pay every month, or every year, for a credit report monitoring subscription. By checking your free credit score number regularly and signing up for the CreditKarma.com free credit report alerts, you should be able to detect when something is going wrong. You’ll have to pay to find out exactly what and then to fix it, but at least you won’t be wasting money buying credit reports or paying fees when there are no issues with your credit.