Knowing your credit score — and understanding where it comes from — is a powerful tool to have in your financial toolbox.
By building your credit, you open up a world of financial opportunities. The higher your score, the better your chances of qualifying for a competitive loan or credit card.
That’s why Credit Karma’s free credit report is so useful to consumers. Not only does Credit Karma reveal your financial profile, but it also connects you with financial products and tax filing services.
For a full breakdown of what this service can do for you — and where it falls short — read on for our full Credit Karma review.
Credit Karma review: How does Credit Karma work?
First and foremost, Credit Karma is a credit tracking service. It gives you free access to your credit scores, as reported by the credit bureaus TransUnion and Equifax. Plus, it breaks down your score into these components:
- Your credit card use
- Payment history
- Credit age
- Total accounts
- Hard inquiries
- Negative marks on your record
In each category, Credit Karma will give you “pro tips” on how to improve. If you have a history of late payments, for instance, the site will encourage you to be mindful of due dates. Even one late payment can drag down your credit score.
By taking an in-depth look at your report, you’ll see exactly what you can do to build your credit. You can log in and check your progress at any time, while also staying alert for any signs of identity theft.
This service is always free for consumers, but you will see promotions for various financial products. Based on your credit score, Credit Karma gives you personalized recommendations for financial products such as loans and credit cards. You can do a quick rate check directly through the site to see if you prequalify.
That being said, you shouldn’t feel pressured to take out a loan or credit card just because you’re eligible for one. Even if the terms are decent, it’s never a good idea to take on debt you don’t need or might not be able to pay back.
If you do decide to take out a loan, however, you might find Credit Karma’s credit score simulator helpful. It shows you what could happen to your score if you open a new credit account.
You could also use the site’s various financial calculators to learn about debt payoff. These include a debt repayment calculator, simple loan calculator, and amortization calculator.
If you need further advice, you can ask financial questions and trade ideas with other members in the Credit Karma Advice Center. (Note that this is a public forum, so don’t share any personal information.)
Credit Karma offers free tax filing, too
On Jan. 23, Credit Karma added a free tax service to its offerings. Anyone can file their federal taxes for free, and people in most states can file state tax returns.
Since the service is relatively new, it can’t help everyone yet. For instance, you can’t file multiple state tax returns.
But most Americans should have no problem using Credit Karma to prepare their taxes for free.
Pros of using Credit Karma
One of the biggest pros of Credit Karma is that it’s completely free for users. At no point will the site ask you to enter your credit card information. You’ll never have to pay to access your credit reports or file your taxes.
If you’re looking for a loan or credit card, Credit Karma’s recommendations can be helpful, too. By following its suggestions, you might have a greater chance of being approved. Not only will that save you from wasting time, but it will protect your credit score from unnecessary hard inquiries.
Finally, you can learn a lot with Credit Karma’s articles and financial calculators. You can read about various financial topics or use tools like its “simple loan calculator” to educate yourself on loan repayment terms.
Once you create an account, you’ll have access to a wealth of information and resources aimed at helping you improve your financial health.
Downsides of using Credit Karma
Although Credit Karma is a valuable resource, it’s not without its downsides. For one thing, it only grabs you credit scores from two of the three major credit bureaus. You’ll see your scores from TransUnion and Equifax, but Experian’s report won’t be included.
Plus, your score comes from the VantageScore 3.0 credit scoring model. Although it is a reputable scoring model, it’s not as common as the FICO model. Most lenders actually rely on your FICO score, not your score from VantageScore, when considering you for a loan or credit card.
Your FICO score might be different from what you see on your Credit Karma report. To get your FICO score, check with your bank or credit card issuer. More and more financial institutions offer FICO scores to consumers for free.
Another downside to Credit Karma is its promotions. Although the service is free for users, Credit Karma makes money when you take out a loan or other product. If you’re not looking for any of these products, all the ads can get tiring.
Plus, the marketplace might not contain the best loans or credit cards for you. If you are looking to borrow money, do research on other sites as well to explore all your options.
Overall, Credit Karma offers valuable, free resources for you to learn about and monitor your credit score. But you won’t necessarily find all the information you need about your financial profile.
Is Credit Karma really free?
Credit Karma actually is free — you won’t pay anything to create an account and monitor your scores.
Instead of charging customers, Credit Karma makes money from its partner companies. If you take out a recommended loan or credit card, the bank or lender pays Credit Karma.
Using the Credit Karma online platform
So, how does Credit Karma work for customers? To start using it, you need to create an online account. It’s a straightforward process that only takes a minute or two.
First, enter your email and a password.
Your next step will be to enter basic information, such as your name and address. You’ll also enter your Social Security number, which Credit Karma uses to pull up your credit report. Credit Karma uses bank-level encryption to secure your personal data.
Once you’ve confirmed your account, you can log in to see your credit reports. You can explore your scores, a timeline of your credit score history, and all your credit factors. Plus, you can research Credit Karma’s collection of financial products.
If you’re interested in a loan, you can go through a quick check to see if you prequalify. This rate check won’t impact your credit score. To take out the loan, you’ll submit a full application with the lender itself.
You’ll also see recommended products below your credit scores. But remember: You’re not obligated to apply for any of them. You can learn more about interest rates and fees on Credit Karma or head to the company website for more information.
Credit Karma customer service
Since it was founded in 2007, Credit Karma has gathered over 75 million members. If you’re one of them, you can connect with customer support by submitting a request through the website.
You can also find answers to frequently asked questions in the Credit Karma Help Center.
Interested in a personal loan?Here are the top personal loan lenders of 2019!
|Lender||APR Range||Loan Amount|
|1 Includes AutoPay discount. Important Disclosures for SoFi.
2 Includes AutoPay discount. Important Disclosures for Payoff.
3 Important Disclosures for FreedomPlus.
4 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
5 Important Disclosures for LendingPoint.
6 Important Disclosures for LendingClub.
All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.95% to 35.89%*. The origination fee ranges from 1% to 6% of the original principal balance and is deducted from your loan proceeds. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at the time of application. The average origination fee is 5.49% as of Q1 2017. In Georgia, the minimum loan amount is $3,025. In Massachusetts, the minimum loan amount is $6,025 if your APR is greater than 12%. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months. Borrower must be a U.S. citizen, permanent resident or be in the United States on a valid long term visa and at least 18 years old. Valid bank account and Social Security number are required. Equal Housing Lender. All loans are subject to credit approval. LendingClub’s physical address is: LendingClub, 71 Stevenson Street, Suite 1000, San Francisco, CA 94105.
†Per reviews collected and authenticated by Bazaarvoice in compliance with the Bazaarvoice Authentication Requirements, supported by anti-fraud technology and human analysis. All reviews can be reviewed at reviews.lendingclub.com
**Based on approximately 60% of borrowers who received offers through LendingClub’s marketing partners between January 1, 2018 to July 20,2018. The time it will take to fund your loan may vary.
7 Important Disclosures for Earnest.
8 Important Disclosures for Avant.
*If approved, the actual loan terms that a customer qualifies for may vary based on credit determination, state law, and other factors. Minimum loan amounts vary by state. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC.
** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33
* Important Disclosures for Upgrade Bank.
Upgrade Bank Disclosures
** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.
|5.60% – 17.67%1||$5,000 - $100,000|
|7.46% – 35.99%||$1,000 - $50,000|
|7.99% – 35.89%*||$1,000 - $50,000|
|5.99% – 24.99%2||$5,000 - $35,000|
|5.99% – 29.99%3||$7,500 - $40,000|
|6.79% – 20.89%4||$5,000 - $50,000|
|9.99% – 35.99%5||$2,000 - $25,000|
|6.95% – 35.89%6||$1,000 - $40,000|
|5.99% – 17.24%7||$5,000 - $75,000|
|9.95% – 35.99%8||$2,000 - $35,000|