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Credit Karma Review (August 2021) — Is It Really Free?

Credit Karma is a free credit score and credit report service. On Credit Karma, you’ll get a snapshot of your credit scores from TransUnion and Equifax—two of the three major credit reporting agencies.


Learn More

on Credit Karma's website

5.0

MayoFi rating

Why we like Credit Karma

We like that Credit Karma is 100% free and yet, offers premium features better than many paid credit score services. Credit Karma doesn’t offer any paid subscriptions because all the premium features of their credit tracking service are apart of your free Credit Karma account.

Cost

Free

Credit scores

TransUnion, Equifax

Credit reports

Yes

Pros

    • Get 100% free credit scores from Equifax and TransUnion
    • Get alerted when there are important changes on your credit reports with free credit monitoring
    • Credit scores are updated weekly
    • Great mobile app
    • Get personalized tips to help improve your credit score
    • Offers a variety of other services including savings account, free tax filing, and more

Cons

    • Recommendations may tempt you to open unnecessary credit cards and loans

What is Credit Karma?

Credit Karma is a free online service that promises truly free credit scores and reports. Since 2007, Credit Karma has been keeping that promise by providing over 100 million American’s with free credit scores and reports from two of the three major credit reporting bureaus—TransUnion and Equifax.

There has been speculation around whether the credit scores provided by Credit Karma are accurate. And the answer is yes, they are accurate. Credit Karma pulls your VantageScore 3.0 credit scores directly from TransUnion and Equifax and presents the information to you in an easy-to-understand way.

In recent years, Credit Karma has expanded its offerings to include services like Credit Karma Savings and Credit Karma Tax. Additionally, you can compare credit cards, loans, and even get a mortgage through Credit Karma’s tools. With a free Credit Karma account, not only will you have access to free credit scores, but you will also get free credit monitoring and gain access to financial tools and education.

Credit Karma top features

Credit Karma is known for providing truly free credit scores, but what other features do they have? Let’s review some of the top tools and features by Credit Karma.

Free credit scores

credit karma free credit score

Credit Karma’s best feature, and what you likely know them for, is their free credit scores. When you create a free account, you’ll immediately get access to both your TransUnion and Equifax credit scores.

Clicking on the scores will reveal more information about them, such as all the credit factors that are used to calculate the score. For example, you can see your payment history, credit utilization, age of credit history, hard inquiries, and more all from your Credit Karma account. 

Furthermore, clicking on any of your credit factors will reveal even more information about the specific notes in your credit report. For instance, if you notice your credit score has dropped a few points, you can click on your credit score to figure out exactly why it has dropped. Credit Karma will display recent hard credit pulls, closed accounts, opened accounts, and any other information that would appear on your credit report.

Your credit scores are updated every Tuesday on Credit Karma.

Credit Karma Tax

credit karma tax free tax returns

Credit Karma Tax is a 100% free tax filing service used by millions of Americans. Similar to other tax filing services such as TurboTax, Credit Karma Tax makes it easy to file your federal and state taxes.

Some of the features you’ll get using Credit Karma Tax include:

  • Smart File: Credit Karma Tax will walk you through step-by-step how to file your taxes using a streamlined process. You can even upload your W-2 information by taking a photo with your phone.
  • Audit Defense: Other tax-filing services will charge a premium to protect you against IRS audits, Credit Karma tax does it free of charge.
  • Max Refund Guarantee: If you file with another tax service and get a bigger refund or owe less in federal taxes, Credit Karma Tax will pay you the difference up to $100.
  • Accurate Calculations Guarantee: Credit Karma Tax will reimburse you up to $1,000 if the IRS or state tax authority penalizes you due to tax errors.
  • Easy to Switch: Easily import your previous tax returns from other tax services such as H&R Block, TurboTax, or TaxAct.

Credit Karma Savings

credit karma savings high-yield savings account

Credit Karma Savings is a high-yield savings account with zero fees and no minimum balance requirements. High-yield savings accounts allow you to earn significantly more interest on your savings than traditional savings accounts.

If you already have a Credit Karma account, you can quickly open a Credit Karma Savings account and start depositing money. You can manage your savings right in the Credit Karma app or website.

Banking services are provided by MBA Bank, Inc. Your savings are FDIC up to $5,000,000, significantly higher than the typical $250,000 at most banks.

Identity monitoring

credit karma free identity monitoring

Credit Karma’s identity monitoring is a service you are automatically enrolled in when you create your free account.

Credit Karma will use your email address to search for breached accounts and threats to your identity. It does this by scanning for your personal information on the dark web, and sending you free alerts and updates if they do spot something suspicious.

Unclaimed money search

credit karma unclaimed money

While signed in to your account, you can search through more than $40 billion of unclaimed money sitting with state governments.

When a business owes you money, but cannot find you, they give your money to the state. The state then holds your money indefinitely and keeps a detailed record of who it belongs to. 

Unfortunately, just because they know who it belongs to, doesn’t always mean you will get the money back. You will need to be proactive and file a claim to get it returned to your pockets—and that’s exactly what Credit Karma’s unclaimed money tool does for you.

Financial calculators

credit karma tools and calculators

Credit Karma has a few calculators that can help you make better financial decisions surrounding your credit.

For example, their Credit Score Simulator can help you see how your credit choices might affect your score. Thinking about closing an old credit card, but don’t know how it will affect your credit score? The Credit Score Simulator can show you.

What if you wanted to open a new card or loan, or perhaps want to request a credit limit increase? The Credit Score Simulator will show you how each of these actions will affect your score.

In addition to the Credit Score Simulator, Credit Karma has other tools and calculators to help you, such as a Debt Repayment Calculator, Simple Loan Calculator, and Amortization Calculator.

Credit Karma alternatives

4.7

MayoFi rating

Cost

From $19.95/mo

Credit scores

FICO®, Experian,
TransUnion, Equifax
Learn More
4.4

MayoFi rating

Cost

$24.95

Credit scores

TransUnion
Learn More
4.8

MayoFi rating

Cost

Free

Credit scores

FICO®, Experian, TransUnion, Equifax
Learn More

How does Credit Karma make money?

You may be wondering to yourself, how can Credit Karma offer so many free services? How are they even making money? Fortunately, Credit Karma is very transparent about how they make money.

Essentially, Credit Karma makes money through affiliate marketing. When you sign up for a free account, you give Credit Karma information such as your name, age, and other information in your credit profile. Credit Karma uses this information to make product recommendations that can help you save money.

If you use any of these recommendations, Credit Karma may get paid by the bank or lender. Because Credit Karma has over 100 million users, they likely have a healthy revenue stream.

Is your Credit Karma credit score accurate?

The credit scores you see on Credit Karma are accurate and come directly from TransUnion and Equifax. If there’s information on your credit report from either of these two credit reporting agencies, it will likely appear on your Credit Karma account eventually.

In the event that you see information on your credit report that is not accurate, Credit Karma gives you the option to dispute the error.

Get started with Credit Karma

Getting started with Credit Karma is safe and 100% free. You can use Credit Karma by downloading the mobile app on the App Store or Google Play.

Additionally, if you prefer to use your desktop or laptop computer, you can sign up on their website. For this review, we will go over what it looks like signing up on your computer. Let’s begin.

Create your free account

credit karma homepage

Step 1: From the homepage of the website, you’ll see a button that says See my scores or Get started. Click on either of these buttons to begin creating your free account.

credit karma free account sign up

Step 2: The next screen should be where you start entering your information, starting with a valid email address and password.

You’ll continue by clicking the Next step button. The next step is to enter a few personal details about yourself, such as your full name, address, date of birth, and the last four digits of your Social Security Number.

Entering your SSN is required. Credit Karma is able to retrieve your credit scores and report from the credit bureaus using only the last four digits of your SSN. Don’t worry, your credit score will not be negatively affected.

Step 3: The final step is to verify your identity by answering a few questions. After that you’ll have access to free credit scores and reports right from your dashboard.

The bottom line

Credit Karma is a legitimate credit score service used by over 100 million Americans. By using Credit Karma, you’re able to get an accurate snapshot of your current credit standing by having free access to your credit scores and reports.

In addition to free credit scores, they offer several other helpful products and services—all of which are free. Signing up for Credit Karma is easy and should take no more than 3–5 minutes.