Whether you’re working on repairing your credit or simply want to find out where yours stands, there are plenty of websites available that claim to offer free credit scores.

Credit Karma

Credit Karma is currently one of the most popular sites, offering its members free credit score updates, monitoring services, and personalized advice on how to improve your score.

So how does it stack up to other sites? And is the information truly reliable? We dug deep to find out exactly what they bring to the table and whether it’s worth taking the time to sign up. Read on for our full Credit Karma review.

How does Credit Karma work?

Unlike other sites, you never have to enter your credit card information, so you don’t have to worry about hidden charges, fees, or trial periods that end suddenly.

How does Credit Karma make money?

They make money by offering promotions to its members from partner companies.

For example, if you apply for one of the “personalized credit cards offers” they suggest to you using their link, they’ll get a kickback from that credit card company. While you can easily opt out of emails at signup, you’ll still get offers when you visit the website.

Is Credit Karma safe?

They pride themselves on keeping your personal information safe, and part of their success in doing so is that they don’t request that much.

As mentioned above, they don’t ask for a credit card number and you only have to enter the last four digits of your social security number to get started. Even that information isn’t stored permanently, so there’s no risk of someone hacking in and stealing part of your social security number.

Additionally, they don’t sell or rent your information to any third parties. This includes both your contact information and your credit information. Your information is safe on the website because they use encryption services to protect online users.

Credit Karma Complaints

Credit Karma’s BBB rating is currently a B+ which is partially due to the 330+ complaints filed within the last three years. However, with more than 50 million members, that’s quite a drop in the bucket, and the company resolved all complaints.

The Better Business Bureau also cites a slow response time to complaints as part of the reason behind their rating. Still, a B+ is an improvement over the last couple of years, demonstrating that they’re taking clear steps to improve their customer service.

They also received an action from the FTC in 2014 for security risks in its mobile app, but those issues have since been addressed.

What You Get with a Credit Karma Account

Once you’re ready to open an account, what benefits do you receive?

The website primarily centers around breaking down your credit information and analyzing the information to help you make financial decisions and gauge what areas might need attention. One of the most appealing features for many users is the access to free credit scores.

Here’s everything you’ll get with your membership:

  • VantageScore 3.0
  • TransUnion credit report, credit score, auto insurance score
  • Equifax credit report and credit score
  • Free credit monitoring
  • Credit report card to help identify weak areas in your credit report
  • Credit score simulator shows how certain actions could potentially raise or lower your credit score

All of this information is displayed in easy-to-use dashboards. You can look at what factors impact your score and Credit Karma breaks down each weighted category in the scoring model to show how you rate in each one.

This helps you know what areas of your finances you should focus on to improve your credit score.

Credit Karma dashboard

For example, you might have an “excellent” rating under your credit utilization, but only score a “fair” for payment history. So you know that your best potential for future growth lies in making regular, on-time payments for your bills each month.

You can also click each category to go into further detail about how different ratios are calculated and what statistics have changed since last month. They also show you how you compare to other Credit Karma users with similar demographics as your own.

It’s quite an in-depth breakdown of all the factors that go into your credit score. This can be very helpful if you’d like a full analysis of what you need to do to help improve your score.

New Features from Credit Karma

Credit Karma has recently rolled out a few extra features to offer members. The first is called Unclaimed Money. You can perform a free search to see if you qualify. When companies owe you money but can’t reach you, for example, they’re required to turn that money over to the state. Members can search a free database to see if they have any outstanding money to claim from the government.

The second new member feature is a free tax return service. It’s similar to Turbo Tax and H&R Block’s software services, with a maximum refund guarantee. Plus, both the federal and state returns are free to file, as are additional forms you may need.

Is Credit Karma free?

It’s true that the service is completely free and the company claims that they will remain so indefinitely. That’s great news for users, but it’s still important to be cautious when browsing the website.

It might be tempting to take out a loan or get a new credit card that you might not otherwise consider when you see all the various financing offers available to you.

Perhaps that is a good thing for some people; after all, everyone needs some sort of financing at some point in their lives. Or maybe your credit has improved and you are eligible to refinance a current loan at a better interest rate and save some serious cash.

One minor complaint from some users is that the user dashboard has a lot of ads and offers from third parties — maybe too many for some.

Of course, these ads and offers are how they make money and can provide their services for free. However, it’s important that you don’t take out unnecessary credit cards or loans just because you’re being offered what seems like a good deal.

Because they have access to so much of your personal and financial information, they are able to make extremely targeted individualized offers to each member. Again, that can be a good thing depending on your financial situation, but it’s never wise to take on extra debt if you don’t need it.

Be sure to use your judgment wisely before committing to any product you’re offered. But hopefully, if you’re using a website like Credit Karma, you’re already determined to use your credit responsibly so you can achieve all of your financial goals.

How accurate is Credit Karma?

Even though the credit scores you receive from Credit Karma come straight from two of the three credit bureaus, they are not FICO scores, the scoring model used by the vast majority of lenders. In the credit industry, these scores are referred to as “FAKOs.”

If you’re interested in getting your real FICO scores for free, check out our article, 13 Credit Cards Offering Free Credit Scores. Some of the credit card companies don’t even require you to be a customer.

While VantageScore 3.0 was actually created by all three credit bureaus, it’s still not as popular as the FICO model. When it comes time to apply for a loan, it’s entirely possible that your FICO score will be quite different from the scores you’ve been tracking through Credit Karma.

There’s no way to tell how big the difference may be; in fact, member reports vary in all different directions. Some users claim that their scores from Credit Karma are much lower than their FICOs, leading them to wonder if the website purposefully reports lower scores to keep customers coming back.

On the other hand, other people are disappointed when they find out that their FICO score is the lower number, and that they don’t qualify for as competitive rates as they had hoped for.

Still, others say that both their FICO and Credit Karma scores had negligible differences. It seems like personal experiences can vary widely, so it’s best to take your personal information with a grain of salt.

Does Credit Karma hurt your credit score?

Many people ask if getting your score from Credit Karma will your hurt your credit. The answer is no. Viewing your credit scores at CreditKarma.com has no effect on your credit at all.

Bottom Line

Using their service to track and analyze your free credit score can be a big help when you’re in the process of looking for a loan. Just remember that when you are shopping for a loan, you should always talk to several lenders and compare offers before choosing one.

If you’re unsure of how accurate your Credit Karma score is compared to the number your lender will pull, just wait until you are ready to actually take the loan out. That way you can batch all of your inquiries together and find out your credit score during the application process.

By doing so, you won’t risk hurting your score with multiple hard pulls on your credit reports from different lenders. Even if most lenders use a FICO score instead of the VantageScore 3.0 provided by Credit Karma, they still offer a useful service.

So does Credit Karma prepare you for the loan application process? Yes, they do provide reputable credit scores that come directly from the information (and formulas) furnished by the credit bureaus.

For people looking for a free, reliable way to monitor their credit scores, Credit Karma provides real-time updates and personalized advice to help you raise your score.

But nothing is an exact science and you can’t rely solely on your their scores to determine how likely you are to get approved for a loan. However, more information is always better than none, especially when it’s free.