Credit Karma is among the highly regarded and valued free credit score and credit monitoring platforms. Credit Karma for instance has more than 100 million members, a platform that claims to assist members make financial gains for free. It means free but is it free? Finally, is there something that can be associated with the potential danger of using Credit Karma? If you’ve never heard of Credit Karma before, in this article, we will give you a detailed description of what Credit Karma is, the kind of services it offers, how it generates its income, and if there is anything that you should be careful about when using Credit Karma.
A brief assessment of Credit Karma
Credit Karma is an application that offers users free credit scores, credit reports, and monitoring. It also assists in informing users about their standing of debts, loans, credit cards, savings accounts, mortgages, and anything that has to do with money. Members of the Credit Karma service can also be advised on how they could better their credit.
Some of the free services that Credit Karma offers its members include:
- Read your TransUnion and Equifax credit reports and scores with no attendant charges
- Possible credit cards and loans that you meet the requirements for
- Credit tracking and fraud alerts
- The borrower has the right to get an overview of his debts, credit history, and other financial accounts.
In addition to its flagship personal finance platform and apps, Credit Karma now also offers:
- Free tax filing services Free. Getting your taxes done for free
- High-yield savings accounts
- Automobile and homeowners insurance quotes
Credit Karma mostly relies on the recommendation and advertising revenue model where it earns commissions from selling advertising spaces and offering recommendation services. Namely, Credit Karma earns money from advertisers and credit card companies once the user crosses over from Credit Karma to apply for the product offered by the credit card company or sign up for the same. This may also acknowledge their profits whenever users qualify and subscribe to products using Credit Karma.
Therefore, the only catch for all the services Credit Karma offers to be free of charge is that the client has to watch third-party ads. However, many members consider it suitable for the availability of multiple free financial services.
The Pros of Credit Karma
There are many benefits of using Credit Karma:
- It’s free! This is Credit Karma’s major advantage: it offers free credit scores and credit report updates from two of the three major credit reporting agencies: TransUnion and Equifax. Such other sites may even cost as much as $40 for the kind of access being offered.
- Built-in credit monitoring alerts: Credit Karma will also track your credit reports on your behalf and alert you if you have any large changes which might mean that your identity has been stolen or someone else is using your credit reports.
- Personalized insights and recommendations: Suggestions include ways to boost your credit score, or you get suggestions on the best loan or card for you depending on your financial position.
- The convenience of having resources you need related to money in one location: For another, Credit Karma can help you see not only your credit information but also your bank account balances, your monthly utility bills, your income, and many more to give you an idea of your overall financial health.
- Preparation of taxes during a given fiscal period without any charges: Credit Karma Tax is an easy-to-use tax filing service that offers free federal and state income tax filing, tax preparation, and e-signature support.
Be careful when talking about the Credit Karma Score because Credit Karma uses the Vantage Score and not FICO scores. The two scores are comparable most of the time and financial institutions deploy FICO in arriving at their credit decisions. Therefore, the scores may differ from that you see on Credit Karma and this is important when it comes to loan rates outside Credit Karma.
Some of the key risks that one can likely encounter with Credit Karma include:
Free credit score and credit report, no credit monitoring for now, yes Credit Karma is free to use.
While you don’t pay any monetary fees, there are some risks to weigh when using its services:
- Limited Identity Theft Insurance. Credit Karma offers insurance of $ 1, 000, 000 against identity theft. However, there are circumstances where users are excluded from the insurance coverage and conditions that the users must fulfill to be covered. Self-control over identity theft situations is also very hard; thus, it is advisable to seek the services of a professional.
- Risk of Data Breaches. That is so as any application that requires access to the financial or personal data of the user poses some level of risk. In this case, Credit Karma requests personal information such as your name, date of birth, physical address, Social Security number, and account credentials for other financial services. If Credit Karma lost your data, it may have resulted from physical or virtual security breaches, which threaten to expose your information to other parties. Remember to set up a paradigm password.
- Too Many Personalized Offers. There is no doubt that recommendations that are given according to your credit history may be beneficial, yet the constant flood of offers may lead to excessive use of credit by users. This could harm your credit rating in the long run, depending on how you use the credit card. It is recommended not to apply for as many credits as possible as it is evident that every credit as advertised in the advertisement should be taken seriously.
What are the Other Companies to Credit Karma?
In case you are uncomfortable with some of the risks mentioned above associated with Credit Karma, you do have other options you can turn to to get your credit reports and scores for free.
Here are a few to consider:
- AnnualCreditReport.com. Current federal law permits you to get a credit report from each of the three major bureaus within a year for free.
- Experian (App and Website). You can also opt for a monthly subscription with Experian to receive your FICO Score every month and have full access to your Experian credit report.
- Credit Sesame. Provides you with free identity theft insurance of $ 1,000,000 and continuously monitors your credit through InnovAlerts.
- Mint by Intuit. A credit monitoring service that gives one unrestricted access to their TransUnion credit score. Financial planning and management are other things, which you also find with them.
- Your Bank or Credit Card Issuer. Banks, credit unions, and credit card companies have joined the bandwagon and more of them are now providing credit score and report information to cardholders through online facilities.
The Bottom Line
Of course, there is always a risk when it comes to trusting any service that requests to access your financial and personal information. That being said, Credit Karma has measures in place regarding security risks such as the dangers of leaks; they use encryption, third-party assessments, monitoring or infrastructure, internal access controls, and cyber insurance. In the end, each user will need to make an informed decision of whether the apparent advantages of Credit Karma’s free services are worth a low probability of experiencing it at some point in the future. As long as Credit Karma users make sure they are careful with the passwords they use and the devices they are accessing the site from, most people who use Credit Karma can easily continue to use the tools it offers with little to no long-term consequences.
Call now for expert credit repair services: (888) 803-7889
Read More:
Can someone steal your identity if your credit is frozen?
What is a legit way to check your credit score?
Which site shows real credit score?
What is the best site to get all 3 credit reports?
Does Annual Credit Report do a hard pull?
