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Free Credit Scores from Credit Karma – No Scam

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Credit Karma is no scam

creditkarma.jpgIf you are looking for free credit scores, look no further. Free credit reports have been around for some time. You can get three reports a year by going to Annual Credit Report. Be very careful not to go to other sites, because they usually trick you into signing up for something that you possibly don't want. One such example is FreeCreditReport.com, which runs commercials on television. They sign you up for credit monitoring that costs $14.95 if you don't cancel within a 7-day free trial (I'll show you later how to get free credit monitoring). The Digerati Life has more information on credit reports.

Credit Reports vs. Credit Scores

When I was first learning about credit, I thought a credit report and a credit score was the same thing. In fact, I never thought twice about either one until I bought a house. I only knew that paying my bills on time would pay dividends down the road. (I was right it did.)

  • Credit Reports - This is the information on how much and what type of credit you have, your payment history, etc.
  • Credit Scores - This is a number that attempts to reflect the credit risk by using the information in your credit report.

For those familiar with sports and the processing of drafting a player, there's an easy parallel. A credit report is analogous all the information your scouts have gathered about the player. This can include how strong he is, how fast he is, his hand-eye coordination, etc. A credit score analogous to what a team does with that information to decide what makes one player better than another come draft day. The Colts and the Patriots might have similar reports on a player, but their scores (how they value the reports) will differ.

Get Your Free Credit Scores with Credit Karma

Most people that have gotten credit scores have gotten a FICO score from the Fair Isaac Corporation. This is simply their interpretation of what's in your credit report. The credit bureaus have their own credit scores as well including Experian's PLUS, Equifax's ScorePower, and TransUnion's credit score. As far as I can tell, it's very hard to get access to these scores for free, with no strings attached. The exception is Credit Karma. You sign up and you get your credit store for free (you can see mine below).

There might be a small string attached to Credit Karma. You need to surrender your social security number to them. It's a necessary piece of information required to get your credit report which is needed to determine your credit score. Some people guard their social security numbers with their lives. In that case, perhaps you are better off paying for your credit scores. I'm feel secure in knowing that Credit Karma is putting a great effort behind security and privacy - their entire business relies on it.

Using Credit Karma

I thought I'd write something long and drawn about using Credit Karma. But it really is simple. You sign up and they give you Dashboard that shows your Credit Karma credit score. You can get an update of your credit score any time you want. However, I really like the Credit Compare page. It gives me a view on how I rank vs. the rest of the United States.

Credit Karma Score Reliability

As you can see from my credit ratings below, I have no issues with Credit Karma's score. It seems to substantiate the teaser mortgage rate that I qualified for 4 years ago. Since I only have my own credit to test, I can only say that it seems very accurate for myself. If anyone else has experience I'd like to hear your story in the comments.

Leadership at Credit Karma

I had a chance to talk with CEO Kenneth Lin at Finovate, a conference for financial start-ups. Unlike real a journalist, I didn't take notes. If I had a pressing set of questions, I may have, but I just I didn't have the time to test out the system then. Plus, as Lazy as I am, I'd rather sit and talk with a guy for a few minutes. Usually by that time I can make my decision as to whether the person is full of bovine excrement. I have to say that Mr. Lin passed the test, not a hint of bovine excrement around.

Final Thoughts on Credit Karma

One of the key questions I ask is, how is this company going to make money? As best I can tell, their model seems to be similar to Mint's... show you offers from advertisers and collect a commission on them.

Another question I ask is, how does this change the marketplace? I think it has potential to be a huge changer for the big credit bureaus. It reminds of when Zecco came out with free stock trades. In my eyes, E*Trade and Ameritrade have to innovate to show that they bring more value for the dollar. I'm not convinced they've done that. In the same way, Credit Karma should force the big credit bureaus to give consumers more value for the dollar spent on a credit score. If they can't adapt Credit Karma will start slowly eating their lunch. In both cases (Zecco and Credit Karma), consumers stand to win big.


So get out there start improving your credit score. Sign up for Credit Karma today!

Last updated on November 6, 2011.

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30 Responses to “Free Credit Scores from Credit Karma – No Scam”

  1. KingTut57 says:

    Good find. I deal with credit and credit scores on a daily basis as I am a finance manager at a new car dealership. I went right to that site to try it. You scored a fair amount better than I did. I was a mere 819. Not bad for 25 years old though.

    Where this site offers a ton of great information there are a couple of walls it will have to climb first.

    Number one is that it is not consistent with any of the other three bureaus. Highest possible score on any of the three (Equifax, Experian, Transunion) is 850. My score on Karma is about 75 points higher than both my median auto-enhanced FICO scores and my standard FICO scores. So, the accuracy of the scores as of right now is unsubstantiated as your score is non-existent on any other bureau and mine is 75 points higher than any other bureaus. Also, on their comparison chart it shows a low score of 150 which is 200 points lower than any possible score on the major three bureaus. I do like the bigger spread (150-950) but if they are going to do that why don’t they stretch it even more and make perfect a 1000 and worse a 000?

    The main three bureaus, as you may have noticed from my last paragraph have different scores for different situations. When I pull a credit report the score will be different than if a mortgage lender were pulling credit.

    One question I have, and I’m sure I’d find it by looking deeper but will checking my credit on Karma count as an inquiry on my credit reports? If so, this could be a damaging aspect to the site as inquiries can have a very damaging affect on a credit score.

    I do like that it does compare my own score with the rest of the country.

    I will say in dealing with lenders on a daily basis that score is becoming less of a factor on loaning than content of a report is. It used to be if you had a high enough score you could get a loan for anything. One bank would loan our customers for any payment if they had a high enough score even if they made less income than the payment amount. We can see why this could be a problem. Lenders are really starting to look at the overall package of an application. Not just score but debt to income, available credit ratios, payment to income, similar sized loan pay history, multiple years on the bureaus, and even things like job time, residence time and so forth. I personally think that people put a little too much value in their score. I’m not saying a good score doesn’t matter, but nowadays there are bigger driving factors.

    Good find though as you are right, you shouldn’t have to pay for your own information.
    I know Karma has to pay for it. I’m sure it’s pennies on the dollar of what we pay, but hopefully they are taking advantage of kickbacks from advertisers as you mentioned was probably the case.

    P.S. I’m done with the MonaVie conversation as it would be a never ending discussion (unless MV was taken down or was proven to be a miracle juice).

  2. KingTut57 says:

    One other note. Social Security Number is not necessary to pull someone’s credit. Credit can be pulled simply by a name and address. If they match the buyer, than the social does not need to be entered. The SSN is simply used to verify who the customer is. You would be surprised but many people don’t remember their socials. They come in to buy a vehicle and give their info. We can pull their credit report/score without it but no bank would lend to them without verifying the SSN. Just thought you should know. Karma is just verifying identities of its users.

  3. Funny! I just wrote about this subject yesterday… :) Someone from CreditKarma wrote me as well and pointed me out to this site. It’s an interesting concept alright!

  4. Lazy Man says:


    Good call on the numbering system. Perhaps it’s a compromise between VantageScore (goes to 990) and FICO (goes to 850).

    I should have mentioned it, but I believe that I asked Mr. Kin that question. I believe he said that Credit Karma uses a soft pull, so it doesn’t hurt your score. You may want to double check this as I couldn’t find the information the FAQ (which was oddly hidden at the bottom of the site).

    “We subsidize our cost of pulling the credit scores by selling advertising on the site.”

    Good call about the SSN being used to identify people. It makes sense as I wouldn’t want some average Joe just to get my credit score for free with just my name and address.

  5. Funny, I just got my credit scores for free yesterday. I was calling up our mortgage lender to ask about an interest rate reduction. While I was on the phone with the loan officer, he pulled my credit scores and told me what they were. So it didn’t cost me anything, and I didn’t need to enter my personal identifying information on any website. Certainly it’s not be an option for everyone, and even for those it’s available to, it might not be a good way to monitor one’s credit score on a monthly basis. But I just thought I’d toss that out there.


  6. CKFounder says:

    Thanks for the post Lazyman. Good, interesting discussion on your site.

    As for the score, we are still in beta and are evaluating what is the most useful for consumers.

    @Kate, Most lender’s don’t have consumer codes. That is, when they do a score request, they do it as a lender and not as consumer. The difference is the lender codes will be an inquiry for credit and a hard pull. The result is a slight decrease in your credit score. Consumer based pulls like Credit Karma are soft pulls and don’t affect your score. I’m not trying to be alarmist and I’m not sure how your friend is set up but I wanted to point out the subtle distinction.

    Overall, I really like these types of discussions since it helps us focus on what consumer want in a service like ours. Thanks again.

  7. KingTut57 says:

    You must be careful with a lender pulling your credit. Every time they look at your credit it will count as an inquiry. The more you have the lower your score goes.

    I did check on CreditKarma as far as if their looking at our credit counts as an inquiry and it does NOT count as an inquiry. Just thought you should know.

  8. Lucky says:

    Great find. I looked into it and they make their money by offering you deals from their partnering advertisers based on your credit score. Pretty clever.

  9. Jon says:

    Has anyone tried a similar service offered at credit.com?

  10. Lazy Man says:

    I don’t have the information that credit.com asks for unless I use annualcreditreport.com to get my credit report and then put it in there. I’m a little Lazy for the two step process ;-).

  11. Mrs. Micah says:

    I used Credit Karma as part of my initial verification that, hey, I have a credit history. I’d signed up along the way and was thrilled to log in one day and see that I actually had a score!!! :)

  12. Brad says:

    If you have an existing account with a lender, they can pull credit on you in a “keeping track of you” sense without it being a hard inquiry. Banks do this often, you’ll often see soft inquiries on your file from the place that you bank with.

    Thanks for the tip on Credit Karma, I’m a fan!

  13. Kevin says:

    I guess the downside is, this “score” is not really worth anything in the real world since everyone important (lenders, etc) uses the FICO score. Just try telling people you have a 890 credit score and they’ll look at you funny (since the highest possible FICO is 850). It’s like telling people you have a 5.0 GPA on a 4 point scale.

  14. CKFounder says:

    @Kevin, We will have a fix for this in the coming weeks. Stay tuned :)

  15. Lazy Man says:

    Since other grading systems go as high as 990, I don’t see the 890 as being an unusual thing. I don’t think that Credit Karma needs a “fix” so much as a translation into other scales – if the other scales make their distribution curves publicly available.

    (Interesting note, my high school did have a 5 GPA scale. So I did have to explain to people that scale was different.)

  16. possibleraise says:

    I used creditkarma for seeing the fluctuations of the past couple of weeks …
    1) credit check for my electricity *ding
    2) credit check for cable *ding

    moving to a new place can be harmful to your credit : )… on a positive note wirefly wants to give me a free blackjack2

  17. Tom says:

    It’s also good to know about the 10% off Lending Club fee offer through Credit Karma if you are looking for a LC loan.

  18. great writeup… I have bene using for more than 6 months… they have a very good credit blog too: http://blog.creditkarma.com

  19. sheed says:

    hey so did you every find out,if we use credit karma does it effect our score a lot or not? And by just logging on to the website and looking at our score? how is determined?

  20. AV says:

    Just came upon this site. I was wondering if the issue of the free “score(s)” (not exactly sure how many scores are provided), provided by Credit Karma have been addressed in regards to the scores not being anywhere near what your actual FICO scores are. I see that “CKFounder” indicated that this would be fixed within weeks. Of course this stated back in July of 2008. And I see no comments or indications that “the fix” was in fact implemented. Please advise. Thanks.

    • Lazy Man says:

      They are pretty accurate for me. However, I use it as a tool to see if my credit score is going up or down over time. If see a drop, then I should probably act and investigate why. If I’m looking to improve my credit score, I should be able to use Credit Karma to note that things are going in the right direction.

  21. Amanda Spencer says:

    I used Credit Karma recently to check mine and my husband’s score. Mine seemed abnormally high compared to a year ago, and compared to my recently acquired Experian score. In addition, my husband’s Transunion score was 10 points lower when checked on Credit Karma than it was when checked on True Credit (also uses Transunion). I’m not sure which one was more accurate, but they were checked within a couple of days of each other, so it would seem that one (or both) is off a little bit. Overall, though, I think it is a great tool to get a general feel for your credit score without having to sign up for anything.

  22. Jayne says:

    It is a relief to finally hear of a company that talks the talk, and actually walks the walk. However, if they claim to only need your SS# once, then how are they to continuously provide further updated info.

    Sincerely appreciate your time.


  23. Karen Mulhollem says:

    If this is another ‘come on’ I will be very unhappy! and will spread the word, as one person said “It’s our score so why would we have to pay for it”

    • Lazy Man says:

      Karen, I think you’ll be happy with Credit Karma.

      Your credit report is yours and you can get one free each at annualcreditreport.com. Your credit score, on the other hand, is a number that interprets the report. Different companies have different scores and that’s their algorithm. So an individual’s credit score is shared – a combination of your report and their algorithm.

      For more on this see this article: http://www.lazymanandmoney.com/credit-score-transparency/

      You might be interested

  24. Janie says:

    Which score do home lenders actually use from the credit karma site? Since they base it off
    Transunion…is it the Vantage or the other score?

    • Lazy Man says:

      I’d bet that home lenders use the FICO score most of the time, which is not what Credit Karma gives you. However, it should be similar as it’s based from the same data.

  25. Karen Mulhollem says:

    what do you mean Credit Karma isn’t giving me my ‘true’ FICO score?
    what ARE they giving me?

    • Lazy Man says:

      They started by giving their own Credit Karma score. I think they’ve added a couple of third party scores like the Vantage score.

      This is a little getting on scale and measuring your weight. Different scales have different weights, but in general they’ll all give you a very good idea of where you stand. Also, if you use the same scale it’s going to accurately measure whether you gain or lose weight. The one place this analogy breaks down is that there is no such thing as a “correct” score like there is with an accurate weight. It’s just that most lenders use the FICO score, so there’s a perception that’s the “correct” one.

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