Credit Karma is not a credit scoring company, it is a third-party company that gathers information from credit-scoring companies and shows you what score they have given you. You may apply to the credit scoring companies yourself and buy a subscription so that you may see your credit report and credit score, but there is no need to pay for a subscription these days when companies such as Credit Karma are kicking around.

With just a few details and your permission, Credit Karma is able to get your credit reports and show them to you. In addition, they are happy to provide this service for free. Plus, the searches do not show up on your credit report. All of these benefits sound too good to be true, which is why the rumors of it being a fraud were so prevalent during 2014 and to a lesser extent in 2015. Below is a screenshot of the company’s home page.

Screenshot of credit Karma home pageWhat The Credit Karma Company Offers

This company allows you to see your credit rating and credit score by signing up. There are no subscription fees or cancellation fees. The service is free and there are no hidden charges. Credit Karma’s searches do not affect your credit rating, and CK allow you to use their online tools for finding loans without charging you for the privilege.

The company shows you what credit-scoring companies say about your credit score and credit report. Credit Karma has its own credit score factors that play a part in the service they provide. The company has access to all the information needed to make its own decisions about your credit score, and even though they do not display the credit score they think you deserve, they do use their own judgment when deciding which lending services would suit you the best. Credit Karma uses these factors to figure out what it thinks your credit score should be. Each factor is linked to the Credit Karma page that explains what it means.

These are the factors that Credit Karma thinks are important for your credit score. You can see how well you are doing on each one if you visit your own Credit Factors page.

Where is the Windows app?

There is an Apple iOS app, and an Android app, so where is the Windows app? There used to be one, but now it has disappeared. All that remains is this lone and unanswered question on the Credit Karma website.

Question screenshot from Credit Karma about windows app

Why Does What Credit Karma Think About Your Score Matter To You?

It doesn’t matter at all. Credit Karma only uses the credit score factors listed above as a way of deciding which offers to send you. They use the factors to figure out which lenders are the most likely to give you credit.

What Credit Karma thinks may give you an indication of what other companies think. For example, an insurance company may disregard much of what the major credit scoring companies say. It may instead consider the factors listed by Credit Karma. If that is the case, there may be a good chance of you getting a better deal than you expected with that particular insurance company.

It is just food for thought. Not all lenders and insurers take credit scoring seriously. They pay attention to it, but some give credit-scoring companies more attention than others do. For example, a risk-taking lender may give loans to people with terrible credit ratings so long as that person has no derogatory marks on his or her credit report.

For example, the company 118118 money uses how many Facebook friends you have as a way of deciding if you are a good candidate to borrow money from them.

How To Cancel Your Account

If you wish to cancel your free or your paid account, you may do it online by following this link to “Cancel Credit Karma Account,” signing in and deactivating your account. Be aware that you cannot sign up again for six months. You are banned from signing up again for six months, even if you try to sign in with a new email address.

Is It A Scam? Note From The Author

I have read many articles saying that credit reports are simply not free, which means Credit Karma is a scam because they are offering free credit reports. I really need to jump in on this subject. Credit Karma is offering completely free credit reports. Every person that signs up with Credit Karma will be given access to a partially full credit report for free.

Partially full means you get to see around 75% of what the banks see when they check your credit report. If you were to pay for your credit report with another company, you would only see an extra 25% more, and frankly, the last 25% is not worth seeing unless you are severely dedicated to details.

Online forums, online articles, and online reviews are going to tell you that Credit Karma is a scam because they offer free credit reports when credit reports are not free, but Credit Karma is offering free credit reports.

Credit Karma Credit Score

  • There are no hidden charges
  • You will not have to give any payment details
  • There are no sign up charges
  • You sign up for free
  • There is no trial period
  • You can cancel and close your account for free
  • There are no maintenance fees
  • You do not have to sign in frequently to keep your account open

Why Are So Many Online Commenters Saying Credit Karma Is A Scam?

The reason is that many scammers have latched on to the name. A press release from Google noted that scam websites are still getting themselves listed on the Google search engine despite Google’s best efforts. They said that scam websites are like weeds where Google will remove one and another appears almost instantly in a different location.

Google does its best to show you legitimate companies in your search engine results. However, there will be times when you search for Credit Karma and a scam result may appear on your search engine results. Some people were taken in by the domain name “KreditKarma.com,” which was a scam website pretending to be Credit Karma.

The Credit Karma website at https://www.creditkarma.com/ is not a scam, but there are plenty of websites claiming to be affiliated with it (or pretending to be it) that are happy to scam you. That is why you need to use the website address given here if you want to be doubly sure if finding the correct website.

Oddly enough, if you type in the scam website address KreditKarma.com, it redirects you to a website called creditify.com which offers a free credit rating. I have no idea if that website is a fake or not.

How Is Credit Karma Making Money?

They offer free credit reports and draw in literally thousands of people per month. Once people have their free credit report, they are able to play around with some of the tools on the Credit Karma website. For example, you can try their quotation tool for credit cards, loans, savings account, insurance and even mortgages.

Plenty of people use the tools and buy the products, such as the loans, insurance, and so forth. When people buy the financial products, the Credit Karma company is paid a juicy referral fee. This business model alone is enough to help the company make a very handsome profit.

What is fun about the tools is that it uses your credit rating to judge the likelihood of you getting the loan, credit card, etc. For example, you may use the loan tool for $5000 over 2 years. The tool will provide you with a list of companies that are likely to lend to you. Each lending company will be shown, along with their offer, their interest rates, term conditions (in brief), and a percentage chance of them saying yes. In that respect, it is very similar to a company called Noddle that exists in the UK.

Credit Karma Has Plenty Of Money

Not only that, but the company has been in business since 2007, and its recent offer of free credit reports is what has propelled it to success. If you ignore the money they are making from selling financial products and affiliate advertising, and just concentrate on the money they have had from sponsors and investors, they have gathered together $368.5 million from investors. That reason alone is why they are not charging a subscription fee to their users; it is because they don’t have to!

Noddle What? And Why Should We Care?

Credit Karma has been around since 2007, but they were not the first company to come up with the idea of giving away free credit reports. Believe it or not, this is another one of the hundreds of thousands of British inventions that has spread around the globe. The first company to do it is called Noddle and they offered their services to the British.

Credit Karma is very much like Noddle with two differences. The financial product tools on Noddle are far more advanced than those on Credit Karma. It is far easier to see if you stand a chance of being accepted on Noddle. Credit Karma has it over Noddle in the credit details department. Credit Karma shows a series of details that expose what is affecting your credit score. It is very detailed to the point where you are able to make significant financial changes in a way that dramatically affect your credit rating.

Credit Karma Factors Affecting Your Credit score on a screenshot

The Credit Karma system is more detailed that its competitors in the specifics of your credit rating, and they also show you two different credit ratings. They show you your credit rating with Equifax and Trans Union.

Credit Companies for credit scores

Signing Up For A Paid Subscription

The company is making a massive amount of money, but that hasn’t stopped them from having a paid subscription. The paid subscription starts the same way they start with the credit scoring companies where you are given a 30-day free trial, and are then expected to pay monthly.

A paid account will allow you to see a full copy of your credit report. As mentioned earlier, they only give you around 75% of your report. You have to pay to receive it all.

Most people will not need to see their full report unless there is a problem, or unless they need the report for another reason other than simply checking for the sake of checking.

The paid subscription doesn’t really do much more than allow you to see your full report. If you have any questions about it or anything regarding the website, then you should try their Help Center because they have covered just about every issue, topic and question that most users have.

Why Show The Trans Union And Equifax Scores?

They are sometimes different, which is why Credit Karma shows them both. Trans Union and Equifax are not operating under the same rules. They both have their own way of creating and generating your credit score. What matters to one may not matter to another.

It is very difficult to find out what factors these credit scoring companies uses. Even when the company discloses some of the factors they consider, there is no way of knowing how they weigh each factor.

A Fact Checked Example Of How Credit Scores Differ

If credit-scoring companies all reached the same conclusion, then wouldn’t there only be one credit scoring company? There are numerous credit-scoring companies because they all reach their own conclusions based on their own scoring protocols. That is why Credit Karma shows you more than one credit score. As mentioned above, it is easy to find hearsay examples of how credit-scoring companies score people differently, but finding an evidence-based example is very tough–but I found one.

Not Paying My Water Bill Showed Up As Extra Debt on screenshot

Not paying the water utility bill in the UK affected my credit rating with UK Experian, but not with UK Equifax and Noddle.

The only example I could find as a fact and not idle Internet gossip is the difference between Equifax and Experian in the UK. In the UK, you have to pay a single company for your water. If you miss a payment for a full month, then it affects your credit rating with Experian, but it simply shows as extra debt on Equifax and Noddle and doesn’t negatively affect your credit rating. That is the only legitimate and fact-checked example I could find that shows how one credit company may have a different credit score to another.

In case you didn’t guess, fact checking this was very difficult because the companies are all very tight lipped about it. The only way I could check was to skip paying my water bill at my UK address for a month, and then check my UK credit ratings with Noddle, Experian and Equifax.

Conclusion – Better Than The Rest

Of all of its competition in the US, it is probably the best credit review company of its kind. It is on par with the European Noddle company, and Credit Karma is likely to be around for a very long time because it is making obscene amounts of money. Make the most of this service while you can before some genius decides that people should go back to paying to see their credit ratings and credit reports.