Credit Karma. Free Credit Score Checks Just A Click Away.

April 1, 2020
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Credit Karma is a personal finance company that allows you to check your credit score and credit reports for free, as many times as you want. It monitors your credit score and helps you keep safe from identity theft. In this article we’ll cover how Credit Karma works, the services they offer, and if they’re really worth it.

What Does Credit Karma Do?

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First and foremost, let’s get this question out of the way, shall we?

Credit Karma is a fintech company that helps people monitor and view their credit score and reports for free. This company was founded in 2007 in the US and made its way to Canada in 2016. Since then, they’ve been helping Canadians with a variety of personal finances tasks, mainly focused on credit of course.

Services Credit Karma Offers

Limitless Access To Your Credit Score And Reports

This is quite the deal when you consider they don’t ask for a fee. There are very few services that let you check your score and report for free, whenever you want. You can use this feature to keep track of your score at all times. It’s helpful to check for differences in your score depending on your recent spending habits. Thanks to this you can easily find out what sort of activities boost your score and which ones drag it down.

Credit Karma also works with Equifax and TransUnion, two of the biggest credit reporting agencies, to give accurate reports when their analyzing your finances. What’s more, this company even helps simplify your credit reports by highlighting the important stuff for you. Very useful stuff.

Constant Credit Monitoring

Whenever there’s a change in your credit score or a new account is opened under your name, you’ll be notified. This is an essential feature.

Identity theft is no joke. Considering there are some unsavory people that try to use other’s credit cards to get a loan by pretending they’re the cardholder, this can be a nightmare for anyone who has to deal with that. In fact, Canadians lost $21.2 million due to identity theft in 2018. That figure is expected to keep on growing, so any tool in the fight against it helps.

One of the ways you can ensure you’re not being cheated out of your money by an imposter is to keep track of your credit score and reports – it’s important to be aware of your finances. Most people never bother to check their credit scores until they need a loan.

Credit Karma automates this process for you, saving you time and effort.

Receive Loans Through Credit Karma

Credit Karma uses LoanConnect to help you find the perfect loan. Loans are available from $500 to $50,000. You’ll be asked for your personal and financial information. After that, you’ll receive a list of loans to choose from. The best part of this is that your credit score won’t be affected by viewing loans you’re eligible for.

What Does Credit Karma Get Out Of This?

Just like any other company, Credit Karma is here to make money, but how do they do that? Well, they have found a business model that ensures you never have to pay, and so far, it’s working out great.

Credit Karma makes money through sponsors which it recommends to its users. These sponsors in turn offer products and services of their own, and when people purchase them, Credit Karma earns a small commission. This way, you can get your credit reporting for dirt cheap while the company gets to make money.

Can You Apply For A Mortgage Using Your Score From Credit Karma?

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A lot of people ask that question, and not just about Credit Karma. A lot of services that help users monitor their credit scores come under fire for not having accurate credit scores.

However, the thing is that there’s no such thing as the ‘right’ credit score. If you’re unaware, this might come as a shocker, but there’s more than one credit score out there. Each one of them is a result of a different formula, and they all have their specific purposes. Some of them are impossible to obtain by regular customers.

What System Does Credit Karma Use?

Credit Karma uses VatageScore, which is one of the many credit scoring systems out there. It works with a range of 300-850, meaning that if you have a score of 700 or above, you’re in the clear.

However, not every lender uses the same system when they do a hard inquiry for your credit score. For example, some lenders use FICO scores to determine if a borrower is suitable for acquiring a mortgage. There are, of course, different versions of FICO scores. It can get pretty complicated and you should be aware of this when soliciting a loan.

What you need to know is that you’re Credit Karma’s score is a good reference point, but it’s not the end-all be-all of credit card scores. Our recommendation is that you use this app to measure your score’s ‘health’ and improve it. On average, there will be a difference of around 20-50 points between different scoring systems.

So, What Does This Mean?

Basically, while this app provides an accurate credit score, but VantageScore is not really as useful as FICO. Bluntly speaking, over 90% of top lenders use FICO. Therefore, don’t be surprised if you request a loan, and find out you have a different credit score than what Credit Karma shows.

Did you know: Applying for loans through multiple lenders simultaneously will decrease your credit score because it makes you look riskier.

Can I Trust Credit Karma?

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In so many words, yes.

Credit Karma doesn’t share any of your details with third parties without your permission. And this his will only happen if you’re applying for a loan or credit card through them.

They have 128-bit encryption which keeps all your data secure, and to beef up their security, they even have a bug bounty program that helps them update their system continuously.

This company is does some heavy-duty work to protect its customers, and while no security system is perfect, we can definitely assure you that this app is safe.

The Advantages

It’s Absolutely Free!

It’s not often that a company offers free services and then sticks to the claim. Each and every service, without question, that Credit Karma provides is absolutely free of cost.

No matter how many times you check your credit reports or score, no one’s going to question you. In sharp contrast, most credit bureaus only offer one credit report a year for free. Anything more will take a toll on your wallet.

Simple To Work With

There’s no beating around the bush with Credit Karma. They have a simple interface that quickly lets you do what you came for – checking your credit score.

No Credit Card Needed

Most ‘free’ apps will ask you for your credit card the moment you click on their sign-up button. They disguise themselves as free but have inbuilt premium services that force you to give up money.

Credit Karma does no such thing. You can use their services without providing any payment method.

Where Credit Karma Is Lacking

Email Customer Support

You won’t be able to phone a customer support rep if you’re facing any trouble with this app. You can only work via emails, and they take time. Especially if you’re reading this during the COVID-19 pandemic, Credit Karma’s support system is even slower than usual since they have fewer hands on deck.

All in all, it’s not that big of a deal, especially considering the app is free, but it’s definitely frustrating in many cases.

Prepare For The Email Spam

Perhaps the greatest weakness that Credit Karma has is its promotional email spam. What’s so bad about email spam, you ask? Surely, one can just disable it?


If you sign up for Credit Karma, you’re doomed to receiving promotional emails from them. For some people, this might not be a bad thing. More emails mean more options to explore. However, if you’re like me, you despise promotional emails.

With any luck, this company might make emails optional – but until then, we’re stuck with them. The only solution here is that you create a separate email account for Credit Karma, but then you’ll have to check it regularly to ensure you don’t miss out on the actually important stuff.

If you decide to unsubscribe from the email completely, then you’ll be missing out on important emails that might alert you of crucial issues (like changes in your credit score) – which sort of renders the app useless.

Recommendations Are Sponsored

Credit Karma claims to recommend services and credit cards to you that it thinks are in your favor. However, it also states that the credit cards on their recommendations list are ranked based on the money they get from their sponsors.

In other words, if a certain card pays more, it gets a sweeter spot on the list, even if there’s a better card for you down below. For a free service, I guess this is a necessary evil. After all, you’re under no obligation to purchase anything that Credit Karma shows you.

Related: Borrowell does a similar job to this app. It helps you borrow loans and keep track of your finances.

Should You Use Credit Karma?

If you’re a Canadian adult looking to improve your credit score, you probably might benefit from having an account with Credit Karma. It never hurts to be on top of things, and you will not be charged a dime. As compared to apps like Credit Verify, which charges you $19.95 a month, Credit Karma is absolute gold.

I really think more people should have this app. Also, it’s expected that the Canadian version will soon have the capabilities right now only available in the US, which even helps you file your taxes now. So, go ahead and sign up!

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