Credit Karma

How Accurate Is Credit Karma-Our Review

July 9, 2020 By Tamila McDonald Leave a Comment

Your credit score and report are critical for your financial well-being. That’s why many people actively track their information over time, allowing them to address issues or make choices to improve their situation. Credit Karma is one option for monitoring your details. But is Credit Karma accurate? Is Credit Karma the best way to track your credit score? If you’re considering questions like that, here’s what you need to know.

What Credit Karma Shows You

When you sign up with Credit Karma, you get access to various kinds of information. While much of what’s available is offers for financial products and services, users also gain insights into their credit.

By heading to the “Credit” section of the app, users can see their most recent score as well as an overview of how various credit factors impact that score. For example, there’s an entry for the user’s payment history, with the percentage reflecting the number of payments that are listed as on-time. It also has a notation for how impactful that factor is, with payment history being listed as “high impact.”

Those details help a person understand where they are shining and if there are specific areas where they could improve. This empowers users to take control of their credit, making sounder choices that lead to higher scores.

For users who want to take a deeper dive, they can view their full credit reports. Here, they’ll see their score again. However, they can also peruse a list of their accounts (open and closed), the state of those accounts, recent inquiries, accounts in collections, and more.

All of the details help a person see if there may be errors harming their score. Plus, they can scan the accounts lists looking for accounts that aren’t theirs, which could be a sign of a mistake or, in the worst-case scenario, identity theft.

Are Credit Karma’s Credit Reports Accurate?

Yes, Credit Karma’s credit reports are generally accurate. In reality, Credit Karma isn’t creating a new credit report. Instead, it’s pulling information directly from a credit bureau or two and showing that information to you. As long as the source credit bureau’s information is accurate, Credit Karma’s will be as well.

Typically, the only time this isn’t the case is when there’s new activity. Credit Karma does refresh the information as frequently as every seven days, depending on how often you log into the app. That means if something changes in your report before the next refresh, the information may be out of date.

Additionally, since Credit Karma relies on reports from bureaus, if a bureau doesn’t have a recent activity on your report, it won’t show for Credit Karma either. For instance, it can take 30 to 60 days for a new account to show up on your credit report.

Plus, not all lenders report to all bureaus, so information may be missing because that bureau wasn’t informed of that account. That’s one of the reasons why your report and score can vary from one bureau to the next, as they are working off of different information.

In those scenarios, the information you see from Credit Karma isn’t technically inaccurate. It’s correct based on what the bureau knows. The trick is, the reporting system itself isn’t perfect.

However, errors in credit reports are always possible. If the credit bureau has incorrect data or you’ve been the victim of identity theft, Credit Karma’s report will also have that inaccurate information. Again, this isn’t the fault of Credit Karma as they have no way of knowing that there’s an issue with the bureau’s data. If that occurs, you need to reach out to the bureau, not Credit Karma, to get it corrected.

Are Credit Karma’s Credit Scores Accurate?

Yes, Credit Karma’s credit scores are mainly accurate. The issue is, Credit Karma doesn’t use the credit score you’re expecting, and that can make it look like there is a discrepancy when there isn’t.

When people apply for credit, the lender usually pulls FICO credit scores. Since they are more widely used, these are the credit scores people are used to seeing.

However, Credit Karma provides users with their VantageScore (currently based on the VantageScore 3.0 model). That isn’t as widely used by lenders when they decide whether to extend a person credit, up a credit limit, or make a similar lending decision. This decreases the degree of familiarity with the scoring model.

This wouldn’t be in issue if the VantageScore and FICO score were calculated in the same manner. However, even though both use the same score range (300 to 850), how a VantageScore is calculated does differ from how a FICO score is calculated.

As a result, a user’s VantageScore and FICO score can be dramatically different, which can cause some confusion. But that doesn’t make either one inaccurate; they simply use different approaches to determine a person’s creditworthiness.

Generally, people’s VantageScores and FICO scores do align to a degree. For example, if your VantageScore qualifies as “good,” there’s a strong chance your FICO score does as well. However, some people do see deviations. For instance, they might have a “good” FICO score and a “fair” VantageScore, even though those scores came from the same bureau.

Using Credit Karma to Track Your Credit

Ultimately, Credit Karma is accurate. You just have to understand that most lenders don’t look at your VantageScore when deciding whether to approve you and that your VantageScore does differ from your FICO score.

But even with that, that doesn’t mean you can’t make the most of Credit Karma. You can monitor your account lists for signs of errors or identity theft. Tracking your credit score is also a good idea. Usually, if your VantageScore rises, so does your FICO score, so you can use Credit Karma to see if you’re making positive progress.

Plus, Credit Karma is free. The company makes money through partnerships with the financial product and service providers it advertises or recommends. Users never pay directly for the service, which is another reason it’s worth considering.

In your mind, is Credit Karma accurate? Do any of the discrepancies above leave you concerned? Have you ever had an issue with the quality of Credit Karma’s information? Share your thoughts in the comments below.

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How Often Does Credit Karma Update?

July 3, 2017 By Alexa Mason Leave a Comment

In the early 2000s it seems like a lot of credit monitoring sites popped up out of nowhere. Many people were wondering whether or not they were legitimate and hesitated trying them. Now sites like Credit Karma are some of the most-visited sites on the web.

If you’re looking to monitor your credit score or improve it, Credit Karma is a great way to do so. The website offers users a number of services, but how often does Credit Karma update?

What is Credit Karma?

Credit Karma’s mission is to make financial progress available to everyone. The website and app provides users with tools and educational supplies to help themselves get to a better place financially. While many other similar companies charge to view your credit score, Credit Karma is able to remain completely free for users.

How to Use Credit Karma

The company is trying to do some great stuff for its users but how easy is Credit Karma to use? Well, like most things today, if you know how to use the internet or a smart phone you can use Credit Karma.

Setting up your account is extremely easy. You provide some basic information (on the app or website) and your account is set up. Once you receive a confirmation email you’ll be able to monitor your credit score and items in collections. You can also use Credit Karma to start paying off your debts and bettering your score over time.

As mentioned before, Credit Karma also offers users a number of educational supplies and even the option to reach out for advice. The folks at Credit Karma also gather up articles and other helpful information for all of its users. You can also get recommendations on loans and credit cards that would be suitable for someone with your current credit score. But, if you’re working on your credit score you may be wondering how often Credit Karma updates its score.

How Often Does Credit Karma Update?

Credit Karma provides its users with a fresh credit score every week. Depending on the day you signed up, you’ll get a new score in exactly one week. Viewing your score this way won’t impact your credit score at all and you can get a good idea of the steps you may need to take to better your credit (or maintain).

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Other Credit Score Apps

Credit Karma isn’t the only website/app offering free credit score reports either. There are many other apps and sites that are offering similar services. Some research and popular opinion have pointed to the following three sites as good Credit Karma alternatives.

Credit Sesame: Credit Sesame is similar to Credit Karma in many ways. It is also a free credit monitoring service. They also offer the same information and similar resources for their users. If you’re looking for a Credit Karma alternative, Credit Sesame is a great place to start.
Credit.com: Credit.com is another good place to go if you’re trying to get a snapshot of your score. It is similar to Credit Sesame and Credit Karma in many ways. By signing up you’ll also get some great Credit.com subscriber emails with tips on how to improve your score.
Select credit cards – Discover Card: Some credit cards offer free credit scores for their customers. Discover card, for instance, gives all of its users a free FICO score once a month. If your credit card company does this it is a great alternative to Credit Karma.

Whether you’re trying to improve your credit score or find out if you can lease a new car, knowing your credit score is important. Staying up to date with an app like Credit Karma is a good idea!

Photo: Fabric Eleven

Does Where You Live Impact Your Credit Score?

February 16, 2016 By Amanda Blankenship 2 Comments

Your credit score is more important than you know. People are constantly looking at it, making decisions about your ability to handle finances. That number can impact all different parts of your life and, while it is just a number, it can prevent you from doing a lot of things. Missing payment on a bill or ignoring creditors can be a big mistake. However, according to a new survey, where you live may have an impact on how you handle debt collectors and how much of your debt is sent to collections too.

Does it really matter where you live when it comes to finance? Well, maybe. According to a new survey released by Credit Karma, there may be some kind of connection between the two. People ages 18 to 24 Taking a look at the 100 largest cities in the United States, the company was able to determine where this age group seemingly has the most debt in collections.

Utility bills, credit card payments and other debts can be easily thrown away. Seeing a debt collector on your caller ID can make it pretty easy to dodge them too. However, throwing it away and ignoring it will not make your debt disappear. Eventually, your debt will be sent along to a collections agency which leaves a mark on your credit report for more than seven years. Young people are especially vulnerable to this.

According to recent studies, only about 28 percent of people between 18 and 24 received any kind of financial education prior to college. Forty-four percent of that same age group has said that they’ve already had accounts sent to collections. But, it seems that they are way too young for that to have happened, right? Well, no. Most 24-year-old have at least one item in collections right now.

This type of financial hardship seems to be running rampant in certain parts of the country. Certain cities seemingly have more young people in debt than others. Is it because they have more young people in the area or because that area simply doesn’t provide enough financial education to these young folks to make a difference? It is up for discretion, however, it is most likely the latter rather than the former sending these young men and women into debt.

The following 10 cities have the most people ages 18-24 who have items that have been sent to collections (city and average number of items in collections – rounded the nearest tenth):

Milwaukee, WI: 3.2
Louisville, KY: 2.3
Indianapolis, IN: 2.3
Charlotte, NC: 2.2
Greensboro, NC: 2.2
St. Petersburg, FL: 1.2
Las Vegas, NV: 2.0
St. Louis, MO: 2.0
Reno, NV: 2.0
Birmingham, AL: 1.9

It seems that throughout the entire country (and maybe especially in North Carolina and Nevada) people are having difficulty managing their finances before they even hit the age of 30. Though a bit disheartening, there may be something to take away from this (and no, it’s not to avoid these cities). There needs to be a movement, nationwide, to better financial education for people prior to heading off to college. It could make all the difference in these people’s lives.

Photo: Flickr: Simon Cunningham

Credit Karma Targets Consumers with No Credit Score

May 5, 2015 By Jeffrey Strain 2 Comments

Credit Karma ffers information to those with no credit score

There are about 15 million people who don’t have a credit score, and Credit Karma wants them to visit their site as well. Although it may seem somewhat ironic that a website which made its name by giving people free credit scores without having to hand over their credit card number would now want to help people who don’t have a credit score at all, the reality is it makes a lot of sense. Credit Karma has expanded their services to also give out two types of free credit reports and with this expansion, it makes more sense that they would want to help consumers who have what the industry calls “thin files” — those people who don’t have a credit score because there isn’t enough credit history and information to calculate a score.

If someone didn’t have enough information in their file to create a credit score in the past, those trying to use the site would be informed of this, and told they would receive an email when there was enough information for them to have a credit score. That is no longer the case. Those who sign up with Credit Karma will be shown their current credit report even if there isn’t enough information in it to produce a credit score. In addition, they will get information explaining why they currently don’t have a credit score, along with steps they can take to begin creating a credit history to get a credit score.

Credit Karma obviously sees this as an excellent opportunity to beef up their bottom line. Consumers who don’t have a credit history can be quite lucrative to a company like Credit Karma, since it can be easier to convert them on offers the site provides. This means the site can recommend credit cards and other types of loans which can help to build credit, which is how they make money. This gives Credit Karma more opportunities to get consumers to adopt products because thin file consumers don’t have to be convinced to switch from a product they already have.

Credit Karma isn’t the only one who understands that thin file consumers need more access to a score. FICO has a new credit score aimed at those potential borrowers who have thin files by taking into account bill payments that aren’t normally used for credit scores such as mobile phone, cable TV, Internet, and utility payments. The FICO Expansion Score takes into account your bill paying history to form a credit risk score.

For those who don’t have enough information in their credit history to currently warrant a traditional credit score, understanding why they don’t can be an important step toward making a decision of whether it’s worth it for them to get one. Since there are a lot of compelling reasons to have a good credit score rather than none at all, including it allows you to save a lot of money,

Did Credit Karma Just Fundamentally Change the Free Credit Score Industry?

February 4, 2015 By Jeffrey Strain 6 Comments

Credit Karma just changed the free report industry

Credit Karma recently announced it was now offering all its customers two free credit reports, an expansion from the one it had previously been offering. Most of those following Credit Karma and the free credit score and report industry looked at this move as nothing more than a convenient expansion of what the company had already been doing. What many have failed to see is this latest move may have fundamentally changed the free credit score and free credit report industry.

What is such a big deal about one company offering two credit reports instead of just one? Up until the announcement, all the major players in the industry were tied exclusively to one of the three credit bureaus. Credit Karma receives its free credit score and credit report information from Transunion. Credit Sesame receives its information exclusively from Experian. Quizzle received its information from Equifax. Credit.com aligns with Experian. Lending Tree gets its information from Transunion. Mint sources its information from Equifax. All the sites giving out free credit scores and free credit reports have, up to this point, only used a single credit reporting bureau.

That’s no longer the case. By offering a second credit report, Credit Karma instantly broke down the exclusive free score and report arrangement that has held between these sites and the credit bureaus for years. Doing so could be a much bigger deal than it first appears. The reason is the information each credit bureau keeps on each customer isn’t necessarily the same. If a consumer wanted to know a credit score or what was on a credit report more than once a year (everyone can receive a free credit report from each of the credit bureaus once a year at AnnualCreditReport), they had to sign up with multiple websites. One to find out their information from Transunion, another to find out their information from Experian, and yet another one to find out their information from Equifax. By becoming the first site to offer credit reports from multiple credit reporting agencies, Credit Karma has lined itself up to be the one-stop shop for this information.

Think about it. If you were a member of Credit Karma for your Transunion information and a member of Quizzle or Mint for your Equifax credit score and report information, with this new announcement, why would you need to keep your Mint or Quizzle account? You can now get both from Credit Karma, which gives consumers a reason to stay if a consumer ever decides he needs to choose between competing sites.

Credit Karma Now Offers Two Free Credit Reports

January 6, 2015 By Jeffrey Strain 6 Comments

Credit Karma announces free Equifax credit report

Credit Karma has been on a spree of offering new financial tools for its members at no cost. The company, which is best known for allowing consumers to get their credit score for free without also having to hand over a credit card, introduced a free credit report from TransUnion in 2014. They have now expanded to offer their members access to another credit report at no cost through Equifax.

Free credit report sites like Credit Karma have been feeling competition from a number of fronts over the last couple of years. Some credit cards began to offer free credit scores to their members with their monthly statements, and the free credit score sites needed to find a way to differentiate themselves. Credit Sesame did this by offering free identity theft protection, while Credit Karma went the free credit report route. Last year they introduced a free credit report from Transunion to all their members.

This past week they announced that in addition to the Transunion credit report, they would also be offering members their Equifax credit report at no cost. Does it really matter having access to two credit reports rather than one? It could, especially since the different credit agencies’ credit reports aren’t identical.

An extra credit report will give users another tool to keep track of their credit. It can also help them spot inaccuracies which may have made their way into only on report or the other, and there are still a lot of errors in those reports. According to the Federal Trade Commission (FTC), 25% of consumers have found innaccuracies on their credit reports which had the portential to negatively impact their credit score.

Another benefit of the two reports is the potential of spotting identity theft in a more timely manner. Signs of identity theft taking place may not show up on every agency’s credit report, so having access to two is better than just one. If a report shows activity the account owner didn’t initiate, the chance of stopping the identity theft early on when not as much damage has happened is good.

How is Credit Karma giving access to two credit reports better than the everyone having access to all three credit agency reports (Credit Karma doesn’t provide a credit report for Experian) as mandated by the Fair Access to Credit Scores Act? While everyone can get a copy of each of their credit reports from AnnualCreditReport.com, they can only get access to the reports once a year. Credit karma will be giving its users access to the reports as often as once a week, which can mean they catch fraud much earlier than they would checking only once a year.