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Credit Karma Review: Can This Free Service Raise Your Credit Score?

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Credit Karma is a free website and app that helps people learn about (and potentially improve) their credit scores. This review explains how it works and what features are available, lists the pros and cons, and answers some of the most common questions people have about using the platform.

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Credit Karma offers free tools to help you monitor and understand your credit score. You can see a chart of your credit score over time, easily review bills in collections, see a list of hard inquiries, and view other key pieces of information that are impacting your credit score. Credit Karma also offers checking and savings accounts, as well as a Credit Builder program to help you save money while improving your credit score. Overall, it’s our favorite credit monitoring app for those looking to closely watch and learn ways to improve their score over time.

Pros:
  • Provides credit updates daily with detailed reports.
  • Credit score simulator helps you plan for the future.
  • Never does a hard credit pull, so using the platform won’t negatively affect your score.
Cons:
  • Credit Karma’s product recommendations are personalized, but they’re limited to partner offers.
  • Does not provide your FICO score or show data from Experian.

Credit Karma Key Facts

Here are some key facts to know about Credit Karma before signing up. 

1. Credit Karma does not give you your FICO score. Instead, it gives you your VantageScore 3.0. VantageScore and FICO are two different credit scoring models. VantageScore 3.0 is a credit score model developed by the three major credit bureaus – Equifax, Experian and TransUnion – while FICO is a credit score model developed by the Fair Isaac Corporation. VantageScore and FICO use different algorithms and thus produce different credit scores. Most importantly, the majority of lenders use your FICO score, not your VantageScore 3.0, when making credit decisions. 

2. There are no fees to use any aspect of Credit Karma

3. Credit Karma makes money by referring you to products and services. As you navigate the site, you’ll notice recommendations for financial products that are based on your current credit score and financial situation. If you act on these offers, Credit Karma will earn a fee or commission. While offers are personalized they are restricted to partners. As such, there’s no guarantee that the specific recommendations you see are the best offers available. 

4. Credit Karma is best for people who need an easy way to monitor their credit. You can use Credit Karma to view all of your open credit cards and loans in one place. Credit Karma is also helpful for those looking to build or improve credit or learn about how credit works, as there are plenty of informative resources. 

More About VantageScore

VantageScore was created by the three major credit bureaus (Experian, Equifax, and TransUnion) in 2006. It’s designed as an alternative to the FICO score and uses slightly different criteria to evaluate your financial health and creditworthiness. However, both systems use the same scale (300 to 850). 

Your VantageScore can vary across credit bureaus, even though they all use the same methodology. This is because lenders and debt collectors may only report to one credit bureau. Credit bureaus also update their reports at different times each month. 

Credit Karma Part 1: Credit Monitoring

Credit Karma has a straightforward and intuitive credit monitoring section that makes it easy to keep track of your current score. 

When you log into Credit Karma, you’ll see a dashboard with your current scores from TransUnion and Equifax, which are updated daily. The platform does not provide an Experian score.

Here’s an example of what it looks like:

Credit Karma Dashboard

You can then click on each score to see how it has changed over time:

Credit Karma Score Chart.
Your credit score over time.

You’ll also see a breakdown of different scoring criteria, such as payment history, current balances, hard inquiries and more:

Credit Karma Score Factors.
These are the factors impacting your credit score.

I found this section to be very helpful. In fact, it identified an old medical bill that I wasn’t aware of that had been negatively impacting my credit score. Credit Karma gave me plenty of information on how to handle the collection and ultimately remove it from my report. 

Credit Score Simulator

Credit Karma has a unique credit score simulator that you can use to predict how your score will change in the future. This tool is powered by TransUnion, so it will only display your TransUnion score. 

With this tool, you can see what might happen to your score if certain things were to happen in the future, such as paying off a credit card, taking out a loan, or having an account go into collections. 

You’ll also see a breakdown of different scoring criteria, such as payment history, current balances, hard inquiries and more.
Example of the Credit Score Simulator in action.

Using this tool can help you plan for your financial future, but it’s important to note that these simulations are just estimates and won’t be 100% accurate. 

I did find that the credit score simulator could have been more thorough. For example, it doesn’t have an option for making a single late payment, but rather shows what would happen if you let your accounts go past due for an extended period of time. 

Credit Karma Part 2: Financial Product Recommendations

Credit Karma provides a variety of financial product recommendations. This includes recommendations for credit cards, loans, insurance coverage and more. 

It’s important to keep in mind that Credit Karma makes money when users purchase a product or service through the links on the platform. However, these recommendations could still be helpful if you’re in the market for one of these products. 

Credit Karma recommended several different credit cards to me, ranked based on my chances of approval. With these recommendations, you can see interest rates and fees upfront, as well as other details about the card. However, you’ll need to visit the card company’s site directly in order to apply. 

I appreciated that Credit Karma only recommended credit cards that I had a good chance of qualifying for, but I would have liked more information about why certain products were recommended. Additionally, it would have been helpful to be shown information about how these recommendations would affect my credit score. 

In addition to financial products, Credit Karma can also recommend services to use and steps to take if you’re struggling financially. 

For example, you can use the site to learn more about benefits like unemployment and food stamps in your area. You can also browse local relief programs to see if you qualify for any assistance. 

Credit Karma Part 3: The Company’s Own Products

In addition to the free Credit Karma platform, Credit Karma also has a variety of other products available. These can be used in conjunction with the Credit Karma platform or on their own. 

Credit Karma Money

Credit Karma Money is a checking and savings account you can open directly with Credit Karma. Both accounts are free to open and have no fees. 

Credit Karma Money checking accounts allow you to withdraw from a network of over 55,000 ATMs across the United States. Credit Karma Money also has a feature that allows you to access your paycheck up to two days early. 

Credit Karma Money accounts are also eligible for Instant Karma. With this feature, purchases up to $5,000 are entered into a random lottery for the chance to be reimbursed. 

The Credit Karma Money savings account is unique in that it is a high-yield account with a 2.73% APY interest rate. This will help you accumulate much more interest over time than a traditional savings account. 

Credit Karma Money accounts are very similar to other online checking and high-yield savings accounts. These accounts are very easy to manage right from your web browser or the Credit Karma mobile app. However, there aren’t any unique features that really differentiate them from other online bank accounts. 

Credit Builder

Credit Karma also offers a Credit Builder tool that’s designed to help you improve your credit score over time. You need a Credit Karma Money account to use this feature. 

Credit Builder is powered by SeedFi, a company that focuses on credit-building loans. This feature is designed to give users a low-risk strategy to build their credit without the extra fees or interest that come with a traditional loan. You also don’t need to hit a minimum credit requirement in order to qualify for Credit Builder, unlike other types of loans. 

Users can sign up for Credit Builder without a hard credit pull. You’ll decide how much you’d like to save to build credit (you can start with just $10 per paycheck). SeedFi then lends you the amount you’d like to save, which is deposited into a locked account. Once you’ve saved $500, the money will be transferred to your Credit Karma Money checking account, at which point you can repeat the process. 

As you save, your on-time payments will be reported to the three major credit bureaus, which can help you slowly increase your credit score. You can also continue to use Credit Builder’s AutoSave feature even after your score has improved. 

More options: check out our reviews of Cred.ai, Credit Strong and Extra, which offer products similar to Credit Karma’s Credit Builder account.

Karma Drive

The platform also has a “Karma Drive” product, a tool that monitors your driving to help you get lower auto insurance rates. The product is part of the Credit Karma app. While you’re in the car, the app will monitor your driving in the background for insights. If you consistently drive safely, you could qualify for discounts with major national auto insurers. 

What makes Karma Drive unique is that your existing rates won’t go down at all based on your driving. Additionally, the app will give you tips to help you drive safely and improve your score. 

In order to take advantage of discounts from Karma Drive, you’ll need to buy a policy directly from the app. You won’t be able to apply these discounts to your existing car insurance policy. Because of this, Karma Drive may not be helpful if you want to stick with the same insurance plan. 

Credit Karma FAQs

Here are some of the most frequently asked questions about the Credit Karma platform and its related services. 

Do you need to provide your Social Security number when signing up for Credit Karma?

Yes, because your Social Security number is used for identity matching and verification. Without providing this, Credit Karma would not be able to access your credit information, and thus would not be able to provide your credit score.

Does Credit Karma offer identity theft protection?

Credit Karma offers free credit monitoring, which alerts you any time there’s been a change to your credit score. This can help you react quickly to identity theft, as you’ll get near-immediate notification if someone tries to fraudulently use your credit profile. The platform also offers identity monitoring, which alerts you to potential breaches of sensitive personal information.

Does Credit Karma show evictions? 

If you’ve been evicted, it won’t show up on your Credit Karma report. In fact, evictions will not appear on any credit report, regardless of which credit bureau is conducting it or what methodology they’re using.

In fact, none of your rental history will show up on your credit report unless you ask your landlord to report payments to one of the credit bureaus. Many people actually use this as a strategy to improve their credit scores, and there are many services that will report your credit history to these credit bureaus for a small fee.

While evictions aren’t automatically reported to credit bureaus, there are some instances where they could negatively affect your credit score. For example, if you have a large amount of unpaid rent prior to your eviction, your landlord could send that rent to collections, at which point it would show up on your credit report. 

Does Credit Karma show collections accounts? 

Yes, you can view all of your current collection accounts on Credit Karma. Specifically, you’ll be able to see any debts in collections that have been reported to TransUnion or Equifax. Credit Karma lists the amount of each debt, the collection agency and the original creditor.

Can Credit Karma hurt your credit score? 

Using the free Credit Karma platform will not hurt your credit score, as they do not conduct a hard credit pull anywhere in the process. 

However, if you apply for a credit card with any of Credit Karma’s advertising partners, they will likely conduct a hard credit pull during the application process. This could lower your credit score by a few points, although it is unlikely to do any long-term damage on its own. 

Does Credit Karma have its own credit card? 

Credit Karma does not currently have its own credit card, although they do offer checking and high-yield savings accounts through Credit Karma Money. 

Does Credit Karma provide loans?

Credit Karma does not provide loans in the traditional sense. However, their Credit Builder tool offers a unique form of a credit-building loan. Unlike a traditional loan, you won’t have access to the funds until you’ve paid them off. 

Does Credit Karma have an app?

Credit Karma has a web platform as well as apps for both iOS and Android devices.

How do you cancel Credit Karma? 

If you’d like to delete your Credit Karma account, you can do so by visiting the Help Center on their website. Keep in mind that if you cancel your Credit Karma account, you’ll lose access to previous credit score data.

If you have a Spend account with Credit Karma Money, the process of canceling is slightly more complex. You’ll need to withdraw all funds from your account and make sure there are no transfers pending, and then contact Credit Karma’s customer service directly.

Closing a Save account is slightly easier; you can do so online through the settings, and your money will be automatically transferred to a linked external account. 

Credit Karma Review: Final Verdict

Credit Karma is a very helpful tool if you’re looking to learn more about your credit score and take steps to improve it. We ranked it #1 on our list of the best free credit score apps.

They have a huge library of educational content, and their Credit Builder tool is a unique way to increase the number of on-time payments on your credit report. 

However, Credit Karma doesn’t provide personalized financial guidance, and the ad-based recommendations can be frustrating to navigate.

They also don’t provide FICO scores or scores from the Experian credit bureau.

If you’re looking for a more complete version of your credit report, you’ll need to visit annualcreditreport.com, which gives you free credit scores from all three major bureaus once every 12 months.

Still, compared to other credit monitoring products — such as Credit Sesame (see our Credit Sesame review) — we found that Credit Karma offers a superior solution. It’s a completely free service with no premium upgrades, and the selection of tools (especially the credit score simulator) is valuable when you’re trying to improve your credit profile.

Visit CreditKarma.com to learn more and sign up.

Sarah Foley
Sarah Foley is a Chicago-based freelance personal finance writer. She has explored a wide range of online side hustles, from paid surveys to transcription to UX testing and more.

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