Credit Karma Review

Are you looking for a credit score service that really is free – as in no strings attached?

Credit Karma is that provider.

When you sign up, you’re provided with not one but two credit scores each month.

They also provide you with the factors that make up your credit score and offer a wealth of services designed to help you up your credit game.

Applying for credit isn’t the only reason you need to be concerned about your credit score.

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Your credit score has a major impact on your insurance score, which will determine the premiums you’ll pay for various types of insurance policies.

And since your credit score is a major determining factor in your insurance score, taking care of one will help the other.

About Credit Karma

credit karma logoCredit Karma opened for business in 2007 and began offering free credit scores in 2008.

With more than 75 million users, it’s probably the largest free credit score service available.

What’s the secret behind Credit Karma’s success?

The service is absolutely free to use!

They don’t even require you to put a credit card on file, the way other free credit score services do.

The service not only enables you to monitor your credit score on a regular basis, but they also provide the component factors which contribute to your score.

This isn’t the same as offering a full-fledged credit report, but it provides the information on your credit report that’s most critical in determining your credit score.

What’s more, while most free credit score services provide you with just one score, Credit Karma provides you with two.

They’ve expanded their menu of services beyond the credit realm by adding a tax-preparation service (see description below).

How Credit Karma Works

After the simple sign-up process, you have immediate access to your credit scores and credit information.

That report will include two scores, one each from TransUnion and Equifax.

The credit scores and information are updated every 30 days, but you have unlimited access to the site and the information it provides.

On a specific day each month, you’ll receive an email from Credit Karma letting you know your new credit scores are available.

But they will also alert you of any significant credit-related events you need to be aware of.

In that way, Credit Karma serves as a credit alert service, as well as credit monitoring.

And for what it’s worth, your new credit scores will not be displayed in the email notification.

The email will let you know that score updates are available, but you will need to log into Credit Karma to access the information, which keeps the information out of the hands of unintended third parties.

The Specific Credit Scores Provided by Credit Karma

As is typical of free credit score providers, the scores you get aren’t your actual FICO score.

That’s the one used by lenders, and you have to pay for a service to provide that score.

There’s another reason why you don’t get your actual FICO score.

You don’t have a single FICO score, but many.

In fact, there are dozens of different versions of your FICO score.

For example, there are different FICO scores for different lending industries, like mortgage, auto, and credit cards.

There are also different versions of FICO scores within each category.

Instead, Credit Karma provides you with what are known as educational scores.

These are not the credit scores used by lenders, but they are parallel scores based on similar credit model criteria.

They will approximate your actual FICO scores.

And once again, because they’re educational scores, there available for free.

The scores provided by TransUnion and Equifax are your VantageScore and are common educational scores provided by free credit score providers.

Even though VantageScores aren’t used by lenders, they nonetheless provide a valuable service to consumers.

They can provide you with an approximation of what your actual FICO scores are, as well as alert you if there are errors on your credit report or even the possibility of fraudulent use of your identity.

And of course, one of the most important aspects of monitoring your credit score, whatever the source, is to be aware of significant changes in the score.

For example, a 40-point drop in your credit score would indicate something serious has happened with your credit.

It could be a payment being reported late, a past due balance going into collection, information reported in error by a creditor, or evidence of fraudulent use.

How Credit Karma Helps You Improve Your Credit and Insurance Scores

When you get your updated credit scores from TransUnion and Equifax, you’ll be able to go to the Score Details link for each credit bureau.

There you will find the factors that are influencing your score.

Once again, you won’t see a full-blown credit report, but you will get a summary version which will be nearly as good.

The link gives you access to five separate categories that are used to compile your credit score:

  • Credit card use
  • Payment history
  • Derogatory remarks
  • Credit age
  • Hard inquiries (instances in which your credit report has been pulled for the purpose of obtaining new credit, or some other reason)

Based on the Score Details, Credit Karma will make suggestions helping you to improve your performance in each category.

It even provides the capability to dispute errors with creditors.

This makes it a perfect vehicle for a person who wants to monitor their credit but isn’t well versed in how the credit reporting universe works.

Tools Provided by Credit Karma to Help You Improve Your Credit Score

When you become familiar with all the tools offered by Credit Karma, you can easily forget it’s a free credit score service.

The platform is packed with tools and information to help you with every aspect of your credit and credit scores.

Credit Simulator

With this tool, you can run various credit scenarios.

For example, you can see what the impact of a 30-day late payment will be on your credit score.

Or you can run a scenario in which you pay off a loan and see what effect that has.

The Credit Simulator will put you in charge of the direction of your credit score.

You’ll be able to determine in advance which strategies will have the most positive impact on your credit score.

You can test out the strategies and implement them only if you’re convinced they’ll have a material positive impact.

Credit Calculators

Credit Karma has several calculators which enable you to manage your credit, improve your credit scores, or even to get out of debt.

Calculators available include:

  • Debt repayment calculator
  • Mortgage refinance calculator
  • Loan amortization calculator (find out how much you owe on any loan at any point, or what you can do to pay it off early)
  • Simple loan calculator

My Recommendations

Credit Karma will display loans that you are likely to qualify for, based on your credit scores.

Not only will they provide a list of lenders, but they’ll also include probable interest rates and terms.

They’ll even give you an evaluation of the likelihood your application will be approved.

There are specific drop-down lists that enable you to review offers available for different loan types.

Credit cards. Credit Karma will enable you to sort credit card offers by various criteria, including lowest interest rate, best rewards points, balance transfers, and other features.

It will enable you to apply for credit cards you want to provide a specific benefit.

Loans. Here, you’ll find information on all other types of loans like auto loans, student loans, home loans, personal loans, and business loans.

Just as is the case with credit card offers, you will be given an opportunity to identify the loans by specific category.

In this section, you will also find that auto loans have their own dedicated page, where you can find the best loans, either to purchase a new car or to refinance your current auto loan.

Auto. This one is a bit of a surprise. What it actually does is answer the question, What’s on your motor vehicle records?

Why does Credit Karma provide that information? They want consumers to be aware of the factors in their motor vehicle records that will affect the premiums they’ll pay for auto insurance.

Debt Consolidation Page

Is debt consolidation always the right answer to your credit problems?

This page will help you evaluate the benefits and complications of using various debt solutions.

These include debt consolidation, credit counseling, and even bankruptcy.

If you’re in too much debt, any one of these options may become necessary.

Credit Karma will help you choose which will work best for you.

Credit Karma Tax

This is a fairly new service offered by Credit Karma launched in 2017.

And like everything else on Credit Karma, Credit Karma Tax is free to use.

What’s more, it can be used to do fairly complicated returns. For example, it can accommodate returns that include:

  • Itemized deductions on Schedule A
  • Self-employed income on Schedule C
  • Capital gains and losses on Schedule D
  • Rental real estate income, and K-1 income from partnerships and S Corporations on Schedule E

You can also use Credit Karma Tax to prepare your state income tax.

And both federal and state returns can be e-filed for free.

Some tax return types that cannot be prepared with Credit Karma Tax include:

  • Business tax returns
  • Multi-state tax returns
  • State income tax returns for filers who are married filing separately in community property states.

Credit Karma Tax Features

In addition to 24/7 customer support, Credit Karma Tax comes with the following tools and features:

Import prior year’s tax information from other tax software. If you prepared last year’s taxes with TurboTax, H&R Block, or TaxAct, you can import the information directly into Credit Karma Tax.

“Click and Fill”. You can add your income information to the app by taking a snapshot of your W-2 and downloading it to Credit Karma Tax. The app will automatically populate the information, saving you time.

Earlybird Advance. You can get a loan on your refund of up to $1,000. There is no interest for the advance, and no fees use the service. The money will be provided to you on a prepaid card.

Credit Karma Plan Packages

Unlike other free credit score services, Credit Karma doesn’t offer tiered service plans.

There’s only one plan, and that’s the one you get for free.

It includes all the features and tools described in this review.

How Credit Karma Can Help Get Your Insurance Score Up

You’re probably at least somewhat aware that lenders aren’t the only entities who check your credit score.

Employers and landlords certainly do, but so do insurance companies.

Insurance companies don’t use your actual credit score, but instead use your insurance score.

And that score is heavily based on your actual credit score.

The best way to improve your insurance score – and to get the best premiums on insurance policies – is by improving your credit score.

Since Credit Karma can help you to improve your credit score, it will also help you raise your insurance score.

Insurance scores are used by insurance companies to predict risk associated with new applicants.

It will be an important factor in determining the premium you will pay for a policy.

Insurance scores run between a low of 200 and a high of 997.

A score above 770 is considered good, while a score below 500 is considered poor.

A good or excellent credit score will help you to reach that all-important 770 insurance score level.

Credit Karma Pricing

Once again, Credit Karma is absolutely free to use.

That may leave you wondering how they make their money, enabling them to offer the service at all.

Do you remember the “My Recommendations” feature?

That’s where Credit Karma offers you loans that are suitable for your credit profile.

If you decide to sign up for any of those products, Credit Karma will receive a small commission for the referral.

Of course, you’re free to completely ignore those recommendations.

But should you decide to choose one or more – and you very well might in time – Credit Karma will receive a small fee.

You won’t pay anything extra for the service you’re signing up for.

It’s just a referral fee from a recommended lender to Credit Karma, and it’s the kind of thing that happens in the business world all the time.

What Credit Karma Offers that the Competition Doesn’t

  • The first advantage Credit Karma provides is that it is a truly free service.

Most free credit services are either free for a specific period of time – then you have to pay to retain the service going forward – or they require you to at least put a credit card on file.

Credit Karma requires none of that.

  • The service also offers several valuable services to help you improve your credit profile.

And since most people who monitor their credit on a regular basis are looking to improve credit too, you have an opportunity to do it all on the same platform.

  • The free tax preparation service is another definite advantage.

This is where Credit Karma has moved beyond strictly providing credit services.

It’s probably also an indication that more non-credit services will be added going forward.

How to Sign Up with Credit Karma

You can sign up with Credit Karma in just a few minutes, and the entire process is done online.

Expect to provide the typical information you would on any credit-related application. Here’s what they’ll need:

  • Your name
  • Physical address
  • Email address (for alerts and notifications).
  • Social security number (to access your credit reports from TransUnion and Equifax)

But once again, one bit of information they won’t require is your credit card information.

Your login credentials will be your email address and a password, which you will create.

Once you’ve signed up, you’ll have immediate access to your credit scores and your credit details.

Should You Sign Up with Credit Karma?

Credit Karma is the most popular of all free credit score monitoring services, and as you can see, there are plenty of good reasons why.

The fact that the service is truly free – and you don’t even need to put a credit card on file – is a major plus.

There’s no fine print that will require you to convert to a premium service at the end of a free trial, because there is no premium service to sign up for.

Credit Karma doesn’t just enable you to monitor your credit score, but they also let you see the factors that generate the score you have.

In addition, they give you plenty of tools to improve your credit score, as well as various loan options you’re likely to qualify for based on your credit profile.

Finally, there’s Credit Karma Tax, which is also free to use.

If your tax situation is either simple or only moderately complicated, you can use this service.

That will enable you to prepare your income taxes on the same platform where you monitor your credit.

As free credit score monitoring services go, Credit Karma is easily one of the best.

If you’d like to get more information, or if you’d like to sign up for the service, visit the Credit Karma website.


Susan Wright, CLU, ChFC, RHU, REBC, ADPA, CITRMS, CIPA has been in the insurance and financial field for over 27 years. Even with years of experience, she continues to create new resources for others. Everything from books to training material.

Susan received her MBA from St. Louis University and her BA from Michigan State University.

She has worked in several areas but excels in writing material for both finances and insurance. Her goal is to give professionals credibility and assist in streamlining the sales process.

She has written countless articles for a variety of websites.

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