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Credit Monitoring

Credit Karma Review

Checking your credit score has become easier and more affordable.

Several credit monitoring platforms, including Credit Karma, offer free credit scores.

In this Credit Karma review, we’ll look at the most common questions people ask about this free service.

What is Credit Karma?

San Francisco-based Credit Karma is an app and website that provides subscribers with free credit scores and free access to some of their credit report data.

But it offers more than just a free credit score. This service can also help you better understand what kind of data creates your credit score.

With this kind of knowledge, you can start improving your credit history which can help you lower interest rates on future loans.

It can also help subscribers avoid (and resolve) identity theft.

What Does Credit Karma Offer?

As a Credit Karma member you’ll get access to a variety of helpful data:

Credit Reports

Credit Karma offers its members credit scores and credit report data from TransUnion and Equifax, two major credit bureaus.

Then it calculates your credit score using the VantageScore 3.0 credit scoring model.

(it does not pull data from Experian, the other major credit bureau.)

You won’t be able to read your credit reports verbatim, but you can see data pulled from your reports.

The data will be organized into categories like payment history and available credit.

In many ways, seeing your data organized this way it actually a lot easier than scrolling through an entire credit report.

However, you can also see your full credit report from all three credit bureaus by visiting

Monitor Credit Inquiries

Credit Karma also helps you monitor inquiries on your credit

Credit inquiries happen whenever you apply for new credit (hard inquiries) or check your own credit score (soft inquiries).

Hard inquiries require your consent. They happen when you apply for a loan or place a security deposit on an apartment or a house.

Through it, you can track when your credit has been pulled as a hard inquiry.

This can be super helpful because if you didn’t consent to the hard inquiry, someone else may be using your identity to open a new credit card account.

Credit Karma itself uses soft credit inquiries to gather the information it provides you, so using this app will not adversely affect your good credit scores.

Free Credit Scores Daily

Some platforms may show your free credit score once a month or once a year, but Credit Karma will display your TransUnion and Equifax scores any time you tap the app or log into your account online.

This access to your score can become a first line of defense against identity theft or errors on your credit report.

If you see a sudden drop in your credit scores, you’ll know to look deeper and find out what’s going on with your credit profile.

Help with Identity Theft

Credit monitoring will help you defend yourself against identity theft, but credit monitoring isn’t always enough.

Once you detect a problem you have to take immediate action to protect your credit information.

Credit Karma can walk you through the steps you need to take if you do become an identity theft victim.

Credit Score Simulator

I especially like Credit Karma’s credit score simulator. This service helps you see how a personal finance decision could affect your score.

The simulator is purely hypothetical and not exact, but it could still help you understand the potential credit impact of a personal finance decision.

You could see how getting a certain personal loan, balance transfer credit card, or auto loan would affect your score or how much your score would increase if you paid off your student loans.

Its credit score simulator is fun to use. You can experiment by trial and error without experiencing any of the actual, real-life negative effects of a bad decision.

Credit Score Comparison

Here’s another interesting feature: it can compare your credit scores with scores of other anonymous subscribers who are also in your age and income categories.

You can see how your Credit Karma score stands compared to existing averages.

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Other Credit Karma Services

Along with free credit monitoring, has a few other tools of note.

As a member, you’d be under no obligation to use or open these Credit Karma accounts, but they’re nice to know about:

  • Auto Insurance Rate Finder: You can see auto insurance quotes through Credit Karma but this service doesn’t add much value when you’re shopping for coverage.
  • Credit Karma Tax Service: It now has an online tax prep service designed to compete with TurboTax, H&R Block, and other leading tax filing platforms. You could file your tax return for free even if you’re a freelancer who doesn’t get W2s from an employer.
  • Credit Karma Savings: This bank account pays online-bank caliber savings rates. Right now, in the current low-interest rate climate, the rate isn’t super impressive. But it remains competitive with other high-interest savings accounts. Plus, the account charges no fees and there’s no minimum balance requirement. You’d have to connect the account to one of your other bank or credit union accounts to withdraw or deposit money. Some customers have reported technical problems when withdrawing their money.

Is Credit Karma Free?

Yes, Credit Karma is completely free to its subscribers.

You won’t be asked to enter your credit card information to register.

There is no free trial involved that may charge you if you do not unsubscribe.

The free credit score offer is not a scam.

But you will have to enter your Social Security number and the system will ask for your phone number and an email address.

The service pledges that it will never sell your contact information or other personal data.

How Does Credit Karma Make Money?

Credit Karma’s free credit reports and free credit monitoring are possible because of advertisements.

Banks pay them to advertise new loans and credit card offers you could qualify for, based on your information that’s recorded on the site.

While this may seem alarming at first, this business model is used by a variety of companies and is very similar to how Facebook uses your information to send you targeted ads.

It does not share your data with third parties.

Credit Karma also receives a commission when you take a new loan or sign up for a credit card with one of its partner companies.

These companies benefit from economized marketing.

Credit Sesame, another free credit monitoring company that competes with Credit Karma, works the same way.

Pros and Cons of Credit Karma


  • It’s user-friendly: Your credit scores from TransUnion and Equifax are presented in a graph on your account dashboard when you sign in. The credit simulator also helps visual learners see how their debt repayment or borrowing decisions could affect their credit scores.
  • Daily Credit Score: While other platforms may restrict your access to a free credit score to once a year, Credit Karma will show your scores whenever you like. When you’re trying to improve bad credit or monitor your credit use, seeing your score on demand helps a lot.
  • Bonus Financial Services: You can use Credit Karma’s tax service or online savings account free of charge. While you can also find these same financial products elsewhere, some users like using the same platform for multiple features.


  • Won’t provide FICO scores: Credit Karma provides data and credit scores from Equifax and TransUnion using the VantageScore 3.0 credit scoring model. This can provide a lot of insight, but most lenders will check your FICO score which could be different. Still, your VantageScore 3.0 score will follow the same trend lines as your FICO score. Incidentally, Credit Sesame also uses the Vantagescore 3.0 model.
  • Advertisements: Ads make Credit Karma’s business model possible, but they can also annoy users. Just know that you should always make your own decisions about new loans, refinances, and credit card offers. You’ll see a lot of ads, but ultimately that’s a small price to pay for contact access to your credit scores.

Credit Karma Safety and Security

Should Credit Karma users worry about a data breach? After all, this platform has millions of Social Security numbers in its database, right?

Credit Karma assures its customers their data is safe thanks to the platform’s 128-bit encryption system with 24/7 monitoring. This level of security is the industry standard for financial services.

Because of some security problems on Credit Karma’s mobile app, the federal government has required that the company turn in security reports every two years until 2034. This works out well for users concerned about a data breach.

Also, you should know Credit Karma does not store your Social Security number. It does store the last four digits of your number so it can pull soft credit inquiries when you check your scores.

Why Should You Use Credit Karma?

You’ll want to know your credit score before applying for a new loan, and Credit Karma offers a free and simple way to track or score from two credit reporting agencies.

Even if you don’t use Credit Karma or its competitor, Credit Sesame, you should find another way to monitor your credit score so you can protect yourself against any discrepancies as to the result of an error or identity theft.

If you don’t mind an ad or two and some affiliate offers, Credit Karma is a superb—and free—way to monitor your credit.

Credit Karma


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