Whether you’re working on repairing your credit or simply want to find out where yours stands, there are plenty of credit score websites available that claim to offer free credit scores. Credit Karma is currently one of the most popular sites, offering its members credit score updates, monitoring services, and personalized advice on how to improve your score.

Credit Karma

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

Trustworthiness of Credit Karma

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. Instead, Credit Karma makes its 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?

Credit Karma prides itself 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, Credit Karma doesn’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 Better Business Bureau rating is currently a B- which is likely due to 390 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. Credit Karma 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 a Credit Karma 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 Credit Karma membership:

  • VantageScore 3.0
  • TransUnion credit report, credit score, auto insurance score
  • Equifax credit report and credit score
  • 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 will break 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.

For example, you might have an “excellent” rating under your credit utilization, but only score a “fair” under 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.

Is Credit Karma Free?

It’s true that Credit Karma 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 new loan or 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 Credit Karma makes its 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 Credit Karma has 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 using your credit responsibly so you can achieve all of your financial goals.

How Accurate is a Credit Karma Score?

Now that you know what types of information to expect from Credit Karma, we next have to look at how accurate it is. 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 credit score from Credit Karma will your hurt your credit score. The answer is no. Viewing your credit scores at CreditKarma.com has no effect on your credit score at all.

The Bottom Line

Using a credit score website to track and analyze your 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. Then you won’t risk hurting your score with multiple hard pulls on your credit report 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? The bottom line is that Credit Karma does 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 Credit Karma 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.