Welcome to my Credit Karma Review. Credit scores have become an integral part of our everyday lives, if you want to get anything on credit you have to have a good credit score. If you know your score and it’s not as good as it could be then you can do something about it. There are quite a few companies out there that will show you your score like Credit Karma, but is Credit Karma a scam?
There have been complaints about this company, but there are just as many happy customers, I’ll go into that a bit later to try and find out the truth behind this company.
NAME: Credit Karma
FOUNDERS: Kenneth Lin, Ryan Graciano
& Nichole Mustard
PRICE: Free to Join
what is credit karma about
Credit Karma was founded in 2007 and is what is known as a free credit report provider, it provides it’s customers with a credit ‘score’ from 2 national credit bureaus, TransUnion and Equifax, there is third major player, Experian that you don’t have access to.
In 2010 their customers had reached the 1 million mark and by 2016 that number rose to 60 million, so you can see it’s a very popular platform, but popular doesn’t necessarily mean it’s any good does it.
Along with the credit scores, CK also gives you access to reports and monitoring which will allow you to quickly pick up on anything out of the ordinary in order to get it resolved as soon as possible so it doesn’t have a negative impact on your credit score.
You have access to a community where you can ask questions which unlike some seems to be very active:
They also give you the resources to find unclaimed money which is a pretty cool feature when you consider there is over $40 billion just sitting there unclaimed.
In December 2016 they added a new Tax return section where you can file your taxes when the time comes.
is it really free?
This the point where a lot of people ask the same question, “how can it be free?” Well it’s pretty simple really. You sign up and get your credit score and reports, right.
Then, based on your profile Credit Karma will make different recommendation on products that they think would be of benefit to you.
They make money if you were to buy one of those products, not from you, but from the product provider, be that a bank, credit card company, whatever the recommendation is.
Credit Karma never requires your credit card when you sign up so they couldn’t actually get any money from you anyway.
how does credit karma work
As I’ve already touched on earlier, CK uses the Vantage 3.0 scoring system. This is not only meant to offer more consistency, but also make credit scores available to people who are just starting out in life and have very little history with credit.
The other model that is used is FICO and they both use the same basic principles for scoring:
- Your payment history
- The length of credit
- The type of credit
- What the credit will be used for
- Recent credit searches
It should be noted that they perform what is known as a ‘soft’ search which has no bearing on your future credit scores.
It’s not only credit scores that CK offers. You can keep track of your spending by connecting your bank accounts which gives you a better overview of what you’re actually spending over a period of time.
Another great feature is the Credit Score Simulator, just to be clear this isn’t a predictor, it can’t show you the future Lol. What it can do is give you a simulated outcome if certain aspects of your circumstances changed, for example applying for a car loan and having it declined.
is it safe to use
In 2014 credit Karma was charged by the FTC of deceiving their customers by failing to securely transmit customers sensitive personal information via their mobile app.
As a result of that ruling CK now have to undergo independent security assessments every other year for the next 20 years which should now mean that all of your information is going to stay safe as it should have done in the very beginning.
is the credit score accurate
Credit Karma uses 2 of the 3 main credit bureaus and as such should reflect what those 2 agencies have on file. However, as you’ll see in the complaints section there are a number of people that don’t agree with that.
Instead they say that CK scores are off by around 50 points. Now because CK uses the Vantage 3 system while others use the FICO system there will be differences, not only that, but mistakes do happen.
Another point to take into consideration is that not all lenders will report to all 3 bureaus, so out of the 3 you might get companies reporting to only 1 or 2 and depending what 1 or 2 that is will determine what kind of score results.
complaints about credit karma
As touched on at the beginning of this review there have been a number of complaints made against the company. Unfortunately Credit Karma holds an F rating with the Better Business Bureau because of its failure to actually respond to complaints, when it does respond it can take way too long and of course the Government action.
These complaints are really only the tip of iceberg, however it took me a lot longer to find anybody that had anything good to say them:
As the old saying goes, “there’s no smoke without fire”.
Is Credit Karma a scam? No of course it isn’t. It’s a free service that makes money through ads and recommendations, sounds a lot like affiliate marketing 🙂
My personal views on this are where are you going to get such a myriad of services for free? OK there are numerous reports of inaccurate scores, but as I explained earlier on, you’re going to get that when you don’t know who the lenders are reporting to.
If it was a case of just having 1 agency then things would be much simpler and accurate, but there isn’t, there’s 3 of them and that, I think, is where the trouble arises.
Don’t forget you’re still getting 2 credit scores out of the 3 for absolutely nothing.
On their FTC ruling, I think that has been resolved and having independent security assessments every other year is going to ensure nothing like that happens again, but we live in an age where even the biggest of companies are getting hacked for their personal information.
Personally I don’t use a credit score website, but that doesn’t mean it isn’t important to keep an eye on what’s going on with your financial history, especially with things like identity theft, it’s good to get updated information so you can act on it fast.
It’s because of this being free and the amount of resources you get here that I can’t really do anything else other than approve it.
Having financial independence is important isn’t, not having to worry too much about money, not having to worry about what your credit score is going to say.
Why should a number determine what you can have in life? Answer, it shouldn’t.
And for me it doesn’t and it could be the same for you too. All you need is a goal and the training to reach that goal. Do you remember when I mentioned affiliate marketing in the section just above, that’s what has enabled me to live the way I do.
Now you might very well be saying “what the hell is Affiliate Marketing?” And if you are then take a quick look at my ‘How To Get Started’ page here, it’ll give you an overview of what’s involved.
Once you know what it is you need to find the best way to learn how to do it and there is no better place on the internet today than Wealthy Affiliate.
If you want to read about the full features of this amazing community you can read my full review here, I’ve been a member there for nearly 4 years now so I know what I’m talking about.
Or if you just want to dive straight in you can click the banner below for free sign up, no credit card and you’ll even get the first 10 lessons for free and 2 totally free websites which are a lot easier to build than you think.
I’ll be there to personally welcome you on the inside 🙂