Are you thinking about buying a house, car, or another form of credit in the future?
When lenders are deciding whether or not they should lend to you, your credit score will be really important.
There’s a company called Credit Karma on which you can get a free credit report.
It’s really important to look at your credit report if you are planning on taking out credit at some point.
This could include consumer debt, but a lot of the time we panic about our credit score when it comes to buying a house or financing a car.
Your credit report is a detailed look at your credit and how it has been impacted by things that you have done in the past.
Credit Karma not only offers free annual credit reports (and more frequently than that), but they have a wide range of other services available.
In this article we will be doing a Credit Karma review, what it is, and the types of things that offer.
What Is Credit Karma?
Credit Karma is an American personal finance website that offers free credit reports, and is hugely popular.
The great thing about Credit Karma from a credit report basis, is that you are able to get a free credit report every month, and a credit score which is updated daily.
If you are trying to improve your credit score because you need to take out credit, these updates will be hugely beneficial to you.
Not only that, but you will receive highlighted sections, which will help to show you what you need to work on in order to improve your credit score.
The credit score that you will receive is called a VantageScore 3.0, and you will receive 2, from Equifax and TransUnion.
What Does Credit Karma Offer?
Credit Karma is best known for the free credit report and score that they provide, but they offer much more than that.
Let’s take a look at everything Credit Karma now offers in our in-depth Credit Karma review.
Free Credit Monitoring
Along with providing your credit score and report, Credit Karma also offers free credit monitoring.
This is really helpful if you don’t want to spend a lot of time going through everything!
They will be able to monitor and inform you of anything regarding your credit that you would like to know, such as potential fraudulent activity.
If you have a busy lifestyle this can save you a lot of time and you won’t have to remember to check it constantly.
Free Tax Prep
You may be surprised to know that Credit Karma offers free tax preparation for state and federal tax.
There are a few that they don’t support, but they will file pretty much any tax return for you, for free!
It’s a quick process, and can save you a lot of money as well as time.
Personalized Credit Cards and Loans Recommendations
This may or may not be something that you are interested in, but Credit Karma also offers personalized credit cards and Credit Karma loans recommendations.
Based on the information that you provide, you will be recommended various financial products to best suit your needs.
The kinds of things that they recommend include:
- Balance Transfer Credit Card Offers
- Debt Consolidation Loans
- Auto Refinancing
- Etc.
Apply For Loans or Credit Cards Directly
Did you know that you can apply for loans or credit cards directly through Credit Karma?
You will need to enter some more information than you currently have, for them to process it. You may however, find this faster than going into your local bank.
Financial Outlook Simulations
- Home Affordability
- Various Credit Score Simulations
- Amortization Calculator
- Etc.
Credit Karma Savings Account
Credit Karma also offers a savings account! It is free to open, and there is no minimum balance required to open it. This is helpful if you have been searching for “Credit Karma open accounts”!
How Does Credit Karma Make Money?
Credit Karma does offer a free service, but they still need to make money. So what’s the truth about Credit Karma?
They typically make their money from advertising. This is something important to note, because the way that good advertising works is to target you specifically.
As Credit Karma has access to your information, including your financial information, they will be able to tailor adverts to you. This is what they will get paid for by the advertisers.
FAQ About Credit Karma
You may have some more questions, so let’s take a look at the most common Credit Karma questions.
Is Credit Karma legit?
Credit Karma is a legit site and company. It was established in 2008 and has over 60 million customers. Wow!
As they deal with your financial information, they have to have a lot of security checks and processes in place.
Is Credit Karma Safe?
When you have your financial information somewhere, it’s only normal to be concerned about whether it is safe or not.
These types of companies have to go through strict security measures to protect your information.
You don’t need to enter your credit card details or your full social security number to use Credit Karma.
There is data encryption set up on the ite to protect your information.
A great benefit of using Credit Karma is that you are able to set up alerts to be notified of any changes, which can alert you to potential identity theft.
In short, Credit Karma have set themselves up as best as possible to protect you and your financial information.
Is Credit Karma Accurate?
The credit score that you will get from Credit Karma is the VantageScore 3.0 which is set up by the companies Equifax, Experian and TransUnion.
The credit scores that you receive will come from Equifax and TransUnion.
FICO scores are more commonly used by lenders, so it’s worth checking this and not just betting on your credit score here.
There are other sites that you can check this on, and your credit score, to give you a good idea of how things are looking across the board, and show you your Credit Karma score vs actual score.
What’s the Catch of Credit Karma?
On a lot of sites that claim to give you free information, they often ask for your credit card details. Credit Karma doesn’t do this!
Credit Karma really does provide a free service for you, but it’s worth thinking about how they make money.
They make money off their advertisers, who use your information to tailor advertising to you specifically. This will usually be financial products.
Will Checking My Credit Score on Credit Karma Hurt My Credit?
Checking your credit score on Credit Karma shouldn’t hurt your credit.
They carry out a soft check when doing your credit checks, which means that it doesn’t leave a mark on your credit report or affect your credit score.
How Does My Fico Score vs Credit Karma Credit Score Compare?
Your FICO score and your Credit Karma credit score may vary. It’s a shame that the FICO score isn’t included, but that doesn’t stop you from obtaining it elsewhere.
The scores should be quite similar, so if you are concerned then you should definitely check out both.
Is There an App?
You’ll be pleased to know that there is an app for Credit Karma, which makes it perfect for checking when you are out and about.
The Credit Karma app is FREE, and available on both Apple and Android devices.
Is it Smart to Use Credit Karma?
Using Credit Karma is a smart thing to do, if you are thinking about getting credit at some point.
If you are going to get credit soon and need to improve your credit score, it is helpful to keep an eye on it with the daily updates from Credit Karma.
Credit scores are a huge factor in the decision that lenders make when deciding to lend you money or not. If you want to be a home-owner at some point, this is especially important.
Why Should I Care About My Credit Score?
We don’t believe that your credit score is something that you should obsess over.
When lenders look at whether they want to lend to you or not, there is a lot that they factor into this decision. It won’t just be based on your credit score being a certain amount.
That being said, it is important to care about your credit score because you may need to take out credit at some point.
As mentioned, if you are getting a mortgage on a property, your credit score will be taken into consideration.
You may not feel as though you need to be worried about your credit score, but it’s always worth keeping an eye on it just in case.
Not only that, but there can be errors on your credit report that you can fix if you notice them quickly.
Are There Any Credit Karma Alternatives?
Credit Karma isn’t the only service out there that offers this – we also like:
- Credit Sesame
- AnnualCreditReport.com
Final Thoughts For The Credit Karma Review
Setting yourself up with smart financial habits can make a huge impact on your life.
Part of good financial management is being aware and on top of things such as your credit score.
There can be so many things that you need to do in order to look after your money, which is why a service like Credit Karma is so helpful.
The daily updates on your credit score are particularly helpful if you are looking to urgently improve your score.
Credit Karma offers so many different services, for free, that it makes sense to sign up today.
Do you use Credit Karma? What is your credit score like?
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