At first I was a bit skeptical about another site offering free credit scores and reports. Credit Karma was recommended to me via Reddit a few months ago, and several users had indicated that it was a good website with helpful information and that they took your privacy seriously. Armed with the Gmail + tip in hand (to detect if they sold my email address to outside companies), I signed up for the service.
After you sign up with Credit Karma the first thing that they request is your Social Security number (SSN). I almost never give this out online, but because of their reputation and the fact that they only use it once and do not store it, I felt more comfortable handing it over. They promise to use your SSN once and then they say they do not use it or store it in their databases at all.
After a few moments, the site returns with your credit score.
A quick word about credit scores to reduce some confusion. There is no single source for credit scores. The most famous one in the United States is called the FICO score. Many agencies evaluate this score for your credit worthiness and an indicator of how likely you are to pay off a potential debt. This score changes depending on who provides the number.
What you get with Credit Karma is their own proprietary score, which from what I have seen is fairly accurate to my FICO score. There is no one-to-one correlation, because the algorithm FICO uses to calculate your score is a secret. Best guesses as to how they figure your score is your past payment history, your revolving credit balances, the types of debt on your credit, and the number of accounts you have.
One of the features I like the best about Credit Karma is that it keeps track of your credit score over time. It also analyzes the core components of your score and makes suggestions on how to improve your score. If your credit score is important to you, this information is invaluable. It also ranks your credit based on other users in your geographical area, age range and email domain. This is an interesting comparison, not really useful for anything but to see how you rank next to others who have signed up to the service.
Now let’s go over how they make their revenue, as I think that is important in determining how legitimate a site is and how they can give you a free credit score when every other site charges for the same service. Once you input your SSN and they look up your credit report, they analyze your credit and determine how you can receive savings in lower interest rates or using one of their advertisers for a new line of credit.
Overall, Credit Karma is a useful site and I would recommend signing up if you are interested in knowing your credit score. If you want your full free credit score, you may obtain them once a year from AnnualCreditReport. This is also important if you think there might be a mistake in your credit record, for example if you have a good payment history and think you have a high credit score, but find out your credit score is actually very low.
If you have any questions about their service, they answer many questions in their FAQ, and also have a good number of articles on their site concerning credit and credit scores in general which are a good read if you are unfamiliar with the topic. I haven’t yet received any emails from any of their ‘partners’. If you are alright with the advertising on their site, then Credit Karma is a great site for getting your credit score.
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