The old maxim, “If it is too good to be true, it probably is,” holds up especially well in the world of personal finance. The concept of getting free credit scores has been mined by con-artists and scammers repeatedly. Unfortunately, most of these scams are perpetrated by well known companies and by the credit reporting bureaus themselves.
The free credit score scam usually goes like this. A company offers to give you a “free” credit score. To get your free score you have to sign up. If you don’t read every word on the screen or printed on the page very carefully (especially the ones in fine print), you might think that you are just signing up to get a free credit score. Gotcha!
What you are actually signing up for is a “free” trial membership in the company’s credit monitoring service. The trial is free for 30 days, or 90 days, but at the end of the free trial, you automatically subscribe to the fully paid subscription. This is why you had to enter a credit card number when you signed up. If they actually had to collect money from you at the end of your free trial, everyone would say, “No thanks.” Instead, they use that credit card to automatically bill you. Most of the time, they bill you for the whole year, in advance, all at once. That way, by the time you notice it on your credit card bill, it is too late for you to back out and get a full refund and since there is no way you want to legitimately subscribe to the service, they get you for 12 months instead of one month.
Worst of all, is that they will automatically renew your subscription when it expires, so 12 months later when you’ve forgotten all about how they screwed you over in the first place, they can do it all over again. It stinks of fraud, but all of the “disclosures” are made (again in tiny print, or buried in a six-page document), so technically it passes legal muster.
Transunion, Equifax, and Experian all pull this marketing scam on their own websites, right next to the part where they try to trick you into getting your “free” credit report that isn’t really free either.
Don’t forget you can get a real free credit report every 12 months (that’s once a year) by law. Don’t ever pay or subscribe to something to get your legitimate free credit report.
Tip: If you have to enter a credit card number, you are getting scammed. Real free credit reports DO NOT require you to enter a credit card number at all.
Free Credit Report from CreditKarma Scam Too?
Knowing all of this about how credit scores work and how credit repair scams an the like go down, I ignored the offer of “free” credit scores from Credit Karma. Scam, scam, scam, I thought.
But, then, I read a write-up about Credit Karma by a financial journalist that I happen to trust and respect. (It is a very small club.) That got me wondering about how it could be true that Credit Karma gives you your credit score for free.
With a legitimate financial writer’s endorsement in mind, I decided to try out Credit Karma. However, I did it very warily.
First, I signed up for a new email address to use so that I would know if Credit Karma sold my email address or spammed it with credit card offers.
Next, I obtained a one-time use online credit card number from one of my credit cards and set the amount to $1 (the lowest allowed) and the expiration to the next month (the shortest allowed.)
Then, I went to Credit Karma’s website at www.creditkarma.com
(There is no link, because I want readers to know that I do not get any sort of kickback, payment, or referral bonus for this review of Credit Karma.)
Continue here to see my full Credit Karma review.
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Tags: credit karma, credit monitoring service, credit reports, credit scores, free annual credit report, online deals, Personal Finance
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CreditKarma is a scam too. They use the same technique that this author has described. They use Scoresense. Before you know it, they will charge $29.95/month.
Right now, they do NOT charge $29.95 per month, or anything else. That isn’t a scam. Just go in with your eyes open that it is not your FICO score.
Give no one your social. That is used for jobs nothing else.It states on the card it self not to be used for ID.
All true in theory. Unfortunately, not true in the real world. It’s required for taxes, any financial account, any background check, rental agreement, many medical facilities, insurance (health, life and auto) and, yes, for any credit report or credit score.
It was supposed to be for employers only, but Congress never got around to making it illegal to use for anything else, and now too many people use it for too many things.
It says no social security number is required. That’s a lie, It asks for it on the second page. What a bunch of liars. Stay clear of it.
No credit card number is required. It does require your SSN. I think I made that pretty clear.
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Been using CK for almost a year. Have no problems. Recommended it to friends who love it to.
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I have been using credikarma for more than a year. They seem to have most of the account info correct. However, the scores are way off. Creditkarma says my score is above 750, but mortgage company just pulled my score the next day and all 3 scores are between 670-680. That’s way off.
I’ve been using it for the past few years and it is a good indicator of your credit health when you are in-between your big three official report pulls. No major problems so far.
I’m going to try it out, and let y’all know my experience.
I loged into CreditKarma. I decided not to tell them my annual income but filled in all the rest. They didn’t ask for any information about my credit cards. When I got in…. My major credit card I own was not listed and they indicated I had no cards. I couldn’t find a way to get a “credit report”. None of the above big three sources of credit scores were mentioned. My credit report was only 680 “fair” my payment history was “F” less than 96% on time when it is actually 100% on time. What do you think about all this? I am suspicious. Please tell me what is going on here.
I don’t work for Credit Karma, so I can’t really say. I know that they use the information on your TransUnion credit report. So, unless the information shows up on that, they won’t know about it. You might want to check your credit report and see what it says. Use the real free credit report website and not one of the sign up for a free credit report websites. Otherwise, I have no idea why there would be such a mismatch. I’ve never heard of that before.
I have meet with different credit counselors from my bank and they have recommended creditkarma. One thing for sure is the Experian score is the score most companies/financial institution uses when they are assessing your score. I dont think creditkarma has anything to do with the score being off, since if you pull all three scores you will still see a difference between Transunion, Equifax, and Experian.
Note that there are 2 sites that use credit karma in their addresses, creditkarma and credit karma. creditkarma is the one that is free and I feel, very useful. Not sure about the other one. But creditkarma has good advice and will let you see how to raise your score, which varies according to which of the big 3 companies a report is pulled from. Recently I got a personal loan and my bank sent me my fico score (from experian)which was different (by many points)than another company, (transunion)so there you go.
I signed up for Credit Karma on Saturday this week. Monday was the first time in 2 years a collection agency had my home number and was chain calling…. The purpose is to see your home information to collection agencies…. I’m in debt because I went to college, there were no jobs once I got out in my field… Now someone wants money from me? What a joke!
That MIGHT be possible, although that would be a very fast update for a creditor to receive, program, and dial on.
Keep in mind that any information on your credit report is available to your creditors. So long as that info is out of date, then I guess no one has your number, but if you update it for any reason (applying for new credit, updated with a bank, signing up with Credit Karma, etc…) then creditors will have access to it. If you are trying to not update your info on your credit report, then be sure to enter the same out of date info on Credit Karma that is already on your credit report.
Thanks for the heads up.
This is not a scam. This is a soft credit pull and yes will be different when you actually apply for credit. Why?? Because when you apply for credit you are graded and the score is always different. Soft pulls are typically higher but can be lower. You are never charged a fee the catch is that you will be asked to apply for credit cards etc. on their site.I just delete the emails and love that it is totally free with cc card input needed.
I use it, gives me some good ideas. But that is right about the FICO score. My FICO score was 35 points higher which put me in EXCELLENT credit. So just use it as a guide.
Let me just break it down for everyone really quick.
Credit Karma is a great free service to track the changes in your credit score. I recommend it, it’s not a scam in the traditional sense.
However, since Credit Karma is NOT providing you with your FICO score (the one that 80% of all lender use) it should only be used as a guide.
Your REAL Credit Score (the FICO score) could be off by as much as 50+ points in either direction.
Fortunately for many, Credit Karma scores are often LOWER than your real FICO scores, but not always.
In our industry we call these FAKO scores and ALL of the “Free” credit scores fall into this category. This includes scores you purchase directly from Trans Union and Experian, plus FreeCreditReport.com, etc.
Helpful perhaps if you are tracking over time, but not always accurate and should NOT be relied on when making critical credit decisions.
Like it or not, thems the facts. Get The Facts About Credit
Thanks for you comment. Even the score you can buy directly from Fair Issac is only ONE of several FICO scores that the company offers. The only credit score that “matters” is the one that gets pulled by the lender at a specific moment in time. Everything else is nothing more than an appraisal or estimate.
I have been using it for a few months now and I was never charged. I seems that it only updates every month but that is not bad for a free score.
According to the consumner advocate Clark Howard, both creditkarma and quizzle will give you a credit score for free (once a year). It won’t cost you money but there is, of course, a gotcha. By doing it, you provide those companies access to your credit report, which they then sell to companies who will potentially send you offers, such as credit cards, car loans, etc. You basically open your file to those financial marketing companies. That may be OK with you, if you find it worth getting a score. Are those companies upfront about their intentions? You decide.
Both companies give you your credit score more than once per year. I’ve been getting mine, approximately monthly.
All three credit bureaus sell mailing lists based upon information in your credit report every single day.
The article from October 2010 I found on Clark Howard’s website suggests no such thing, other than that the three sites he mentions may try to “up-sell” you additional services. He also points out that these are not “true” FICO scores.
I have seen no increase in either junk mail or email since signing up with CreditKarma. I have no crystal ball or telepathy powers, but I have seen no ill effects as of yet.
As I just found out the hard way DIRECTLY from Experian, the credit score given to consumers is NOT the same as what they give lenders. I called them after being told by several lenders that my credit score was 50-75 points lower then what Experian’s own credit score tracking service reported to me. The support person told me the scores are based on different data and this is the case for ALL of these consumer services. To me this makes them ALL scams.
It is NOT a scam. I have been using it for over a year. I check my credit score several times a month. I have never been charged a thing!
Is it a scam or not?
Find out on Tuesday at Credit Karma Free Credit Score review.
(Spoiler alert: It’s legit.)
well,
what happened??
Distracted by my paying jobs and vacations
You can see the rest here at free credit score at Credit Karma review.