Have you ever wondered what Credit Karma is? And how does it work? There are possibilities that you have seen their ads on television.
But there are several questions about whether the credit scores & reports you get on Credit Karma are accurate or not.
If you are here to get answers to all these queries, you have landed on the right page. Once you read my Credit Karma reviews blog post until the end, you will have an answer to all your queries. Additionally, it will make your life easy while using Credit Karma.
Let us first start with understanding what Credit Karma is before I let you know the pros and cons of Credit Karma.
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What is Credit Karma?
We tend to find a free service in all our tasks before going for a paid service. Do you agree with me? Credit Karma fulfills your wish of getting free financial expert services.
Credit Karma is a free online service providing monthly credit scores to all its users since 2007.
Additionally, being a user, you are entitled to get other services like credit monitoring, federal & state income tax preparation, recommendations for credit cards and loans, etc.
However, you might wonder how Credit Karma is funding the operations carried out by the team? Credit Karma pairs your credit scores with credit cards.
Usually, it accepts applicants with a similar credit score. If you apply for a credit card using Credit Karma, they get a small commission.
Note – For your information, recommendations for credit cards support their operations.
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What are the Features of Credit Karma?
There are 4 features of Credit Karma that caught my attention. I feel you must check it out.
1. Check your credit score for free.
The main advantage of using Credit Karma is getting a free credit score. Back in 2007, they became the first-ever online platform to provide a free credit score.
As a result, they have become one of the largest online platforms providing free credit scores. Additionally, they run great TV commercials to promote their job.
Credit Karma provides you with VantageScore 3.0, developed by three credit bureaus, i.e., Equifax, Experian, and TransUnion. It is a correct alternative to the previous FICO scoring model, which is still relevant.
However, there are money lenders who still consider FICO scores as the benchmark. But, VantageScore is similar to the FICO score. It can give you an idea of what your FICO score would be.
Good to read – Credit Karma vs. FICO Score
You might wonder how your credit score will update on Credit Karma?
Whenever you log in on Credit Karma, your credit score is updated by fetching data from Experian and TransUnion.
If you wish to know more about the software and want to know your free credit score, get started with Credit Karma now!
2. Get your Credit Monitored for Free
Credit monitoring is an additional perk provided by Credit Karma. Credit monitoring works hand-in-hand with the credit score.
Credit Karma has access to your credit report. Hence, it becomes easy for Credit Karma to monitor your credit and give you timely alerts whenever there is any unusual activity.
The best example is sending a notification when you apply for a new Credit Card or mortgage loan based on your credit score. If your application is approved, Credit Karma sends you a notification stating the approval message.
In today’s scenario, several financial frauds are happening throughout the world. In simple terms, such notifications or credit monitoring services will safeguard you from any financial scam.
We hear news regarding data breaches very often. Free credit monitoring service that fetches information from two of the three credit bureaus is something everyone must consider while signing up on Credit Karma.
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Get Free Tax Filing with Credit Karma
Credit Karma introduced free tax preparation services recently. It was introduced for the financial year 2016, filing in 2017.
It is one of the best features of Credit Karma so far. As per the study, nearly 1 million users took advantage of Credit Karma’s free federal and state income tax services.
Credit Karma files almost all the tax returns for free. If you are tired of declining your current tax programs or that you can file a federal return for free and have to invest in the state tax return, then Credit Karma is the best option for you.
Please Note – There are a few unsupported forms where Credit Karma is not filing New Mexico State tax returns or part-year resident returns.
However, you need to understand that Credit Karma provides you with the free services of tax filing.
Hence, you might not get the same user experience you get on paid services of TurboTax or H&R Block. Users who are new to Credit Karma must make a note of it.
3. Get Free Recommendations for Credit Cards & Loans
There are nearly 60 million users who use the free credit score and credit monitoring services of Credit Karma.
However, Credit Karma has its bills to pay for these free services. Credit Karma earns commission through credit cards and loan applications made using the application.
Credit Karma provides you with free recommendations on credit cards & loans based on your credit score & history.
For example, if you have a credit score of 750 or more, Credit Karma can recommend you for American Express’ Blue Cash Everyday Card.
However, you can filter out credit card recommendations based on the following queries.
- How much balance does it allow to transfer?
- How low is the interest rate?
- Does it provide any benefits in airline-related transactions?
- How much reward does a user get after any transactions?
- How much cashback does a user get after every transaction?
- Are there any business benefits after using the recommended credit card?
- Are there benefits for students?
However, I will have to note that they don’t have every imaginable card listed in their recommendations. But, for now, they have all the possible cards listed.
How do we guess whether Credit Karma’s recommendations are perfect regarding Credit Cards?
In addition to Credit Karma providing you free services, it also provides a chance to users to share their feedback regarding credit card recommendations. You might find these reviews helpful as it lists how people get rewarded, whether they get any cashback or not, and their overall experience.
For you, reading these reviews will benefit you more than Credit Karma’s odds of approval measure.
The primary reason is that every application is different and has a different credit score. Additionally, no user will have the same credit history even if the credit score is the same. It varies, and hence, I recommend you to check credit card user reviews.
Credit Karma’s Loan Recommendations
Credit Karma offers recommendations for loans, as said previously. The loans are of the following types.
If you wish to get recommendations for any loan types, you will be asked to enter additional information like age, income, and employment details.
However, I would like to mention that entering this information is more comfortable than visiting the bank branch and applying for a loan. Also, it is a perfect way of comparing the interest rates.
Pros & Cons of Credit Karma
Let me tell you, every user searches out for the pros and cons of a particular application before using it. I hope you agree with me?
Hence, let us understand the pros and cons of Credit Karma in detail here.
Pros of using Credit Karma
- You can get free credit scores and credit monitoring services for a lifetime.
- You are not asked to apply for a loan and credit card if you wish to use Credit Karma.
- You get free federal and state tax preparation.
- You will find signing up on Credit Karma very easy.
- Credit Karma pulls its data from third-party resources.
- I feel the overall user experience of Credit Karma is good.
Cons of using Credit Karma
- You will receive a VantageScore instead of a FICO score.
- You will not be able to access the actual credit report.
- Possibly, you will get intrusive financial recommendations.
- Since Credit Karma fetches information from TransUnion and Equifax, it will show you only 2 credit scores.
- Credit Karma does not allow any user to change the setting of auto-logout.
The most significant advantage of using Credit Karma is that it is free for users to sign up. Credit Karma does not charge a single penny from its users.
Other Important Information that might help you with your Credit Card Repair
Improving your credit score is a challenging task. Credit Saint is a credit repair company that helps you improve and boost your credit score by building a positive payment history. Other alternatives include Disputebee, Lexington Law & Credit Repair Cloud.
Credit Karma currently has more than 60 million users. Hence, I can call it 60 million strong. Over a while, they have done a tremendous job providing you with free credit scores and credit monitoring services.
I agree that they provide Vantage Score in place of the “gold standard – FICO score.” However, Vantage Score is a perfect alternative to the FICO score.
Lastly, the resources available at Credit Karma are convenient to track your credit activity. These resources ensure your successful planning to apply for the upcoming credit card application.
Is Credit Karma free?
Yes, it is free for all users. You can apply for the loan using Credit Karma, and if approved, they collect a commission from the moneylender.
Is it safe to use Credit Karma?
Yes, it is 100% safe to use Credit Karma. To protect your data, it uses a 128-bit encryption technique, which is impossible to track.
Does Credit Karma show accurate credit scores?
Credit Karma fetches information collected from two of the three credit bureaus – TransUnion and Equifax. Hence, credit scores and reports you see on Credit Karma are accurate.
Is it bad to check your credit score on Credit Karma?
Checking credit scores on Credit Karma is a soft call, and it does not affect your credit. Hence, checking credit scores on Credit Karma is not bad.