Wondering if Credit Karma is safe or a scam? Or are you considering opening an account with Credit Karma and want to know if the company’s credit score and reporting services are legit and worth it? This Credit Karma review will help you evaluate whether the company’s online products and services are right for you.
There are a lot of scams on the fringes of the credit industry. Whether it’s preying on people’s desperation to obtain their credit report or fraudulent credit counselors charging an arm and a leg for unsound credit advice (when there are multiple avenues – such as nonprofit organizations – through which you can get credit counseling), navigating the web and differentiating between what’s legit and what’s a scam can cause some headaches.
Luckily, Credit Karma is there to help. Not only does this website help you track your credit score, but it offers valuable credit advice, research tools, and calculators for free. If you’re looking for resources to track and improve your credit score, look no further because Credit Karma is a top-notch website for anyone curious or struggling with credit.
Getting Started with Credit Karma
As previously stated, Credit Karma’s tools and services are completely free. You won’t be led on by a promising offer, only to be told that you need to pay upfront before seeing your credit score. All you need is an account with some personal information. Using Credit Karma won’t affect your credit score, and you’ll be able to go back and see your previous credit scores (starting with the score you had when you first opened the account).
Credit Report Card
One of the best alternatives to an official credit report (though you might want to get one, just in case) is Credit Karma’s credit report card. It was specifically designed to ameliorate the shortcomings of AnnualCreditReport.com in that the report card allows you to track changes in your credit score on a daily basis (whereas an official credit report can only be obtained once per year from each of the three major bureaus and these reports don’t indicate your credit score).
With Credit Karma, you’re also in a better position to examine the different aspects of a credit report and analyze how you’re doing with Credit Karma’s grading system. This allows you to pinpoint weaknesses in your credit report and from there, Credit Karma can direct you to informative resources to help you improve.
Credit History and Monitoring
Credit Karma created a real winner with their history tracker: not only can you track how your credit is faring over a given timeframe, but you could potentially save a lot of money in interest payments by being able to make adjustments accordingly.
Having a good credit history correlates with a high credit score and Credit Karma will help you keep track of the percentage of payments you made on time (late payments can negatively affect your credit score), the average age of your open lines of credit (those with a more extensive credit history will have an easier time of assessing their credit worthiness), and derogatory marks, such as bankruptcies, liens, and accounts in collections, which could remain on your credit report for the next seven to ten years. Altogether, these itemizations make for a comprehensive review of your credit history.
Credit Karma also offers a credit monitoring service, which helps you prevent identity theft by signaling any changes in your credit activities (they alert you via email). Whereas many other companies would charge $10-30 per month for this service, Credit Karma offers it for free (no hidden fees, either).
Credit Score Simulator
One of the more advanced services Credit Karma offers – free of charge, as usual – is the credit score simulator. With this, you’re able to see what would become of your credit score if you were to apply and receive a new card, increase your existing line of credit, apply for another loan, transfer balances to a new card, close accounts, etc. This is one of the easiest ways to see what exactly hurts and helps your credit score and allows you to make changes accordingly.
You’re also able to pinpoint potential savings opportunities (switching to a different card, opening a new account, etc.) and pursue those as you improve your credit score to match your ideal financial situation as presented in the simulator.
Credit Card Recommendations
One of Credit Karma’s best resources is its credit card recommendations page. Whether you have poor, fair, good, or excellent credit, Credit Karma has a variety of cards that you could qualify for. Specifically, there are some credit cards for people with good credit who want to scope out their options. Each of the cards listed in Credit Karma’s database has a detailed list of benefits, APR, conditions, and reviews from other cardholders.
If you have poor credit, you’ll be able to find out which cards are suited for your credit score. As you build your credit back up from there, you could qualify for better cards in the future – and Credit Karma will be there to help you shop around for the best card for your situation.
Downsides
Credit Karma may not be 100% accurate all the time, but the pros tend to outweigh the cons in this situation. Still, there are admittedly some downsides involved.
Lack of Comprehensive Credit Score
Credit Karma does an excellent job when it comes to assessing your credit situation, but it doesn’t fully replace the three major credit bureaus when it comes to determining your overall, concrete credit score. Obtaining a credit report from these bureaus and using Credit Karma to improve your score will make up for the lack of a comprehensive credit score.
Is Credit Karma Safe?
It may seem a little daunting to enter your personal financial information over the internet, but Credit Karma’s website promises to never share this information with third parties or their partners. They won’t send spam emails or junk mail to your physical home address, either. And, to ensure utmost protection for your personal privacy, the company’s privacy policy was approved by the independent third party, TRUSTe.
Why Credit Karma Is Good
US consumers are entitled to one free credit report per year from the credit bureaus (Equifax, TransUnion, Experian), but it takes more than a credit report to see how your finances are faring. Credit Karma steps up to the plate with its variety of free resources to help consumers understand their credit score and learn how to improve from there.