Is Credit Karma a Scam? The Ultimate Credit Karma Review

Is Credit Karma a Scam? The Ultimate Credit Karma Review

Everybody knows that there is no such thing as a free lunch.  So when I found out that Credit Karma offers free credit score, here is what came to mind first!  Is Credit Karma a scam or a legit service company? And so I had to find out where the truth lies.

Is Credit Karma a Scam

Company: Credit Karma


Owner: Kenneth Lin

Overall Ranking: 4.1 points out of 5

Who is it for: Everyone

Is Credit Karma a Scam or a Legitimate Service Company?


I am sure you have heard the old saying that if something is too good to be true, then it probably is. So, because you want know how reliable Credit Karma is,  you do a quick search credit Karma online. By the way, not everybody is going to spell credit Karma correct.  Typing Credit Karma or Credit Carma or even kredit Karma into search engines produce different results. And so you still ask yourself is Credit Karma a scam and how genuine their service is. offers free credit scores and reports, really?  Yes, they do!  Credit Karma is a legitimate service that is being used by over 60 million members as of November of 2016. It is recently growing its reach to Canada. This is a genuine company with an equally legitimate business model and it has actually been around since 2007.  Credit Karma is based in San Francisco, California.

This company is digicert certified with a strong history of complaints and responses through BBB, which is reassuring, if anything.  Credit Karma offers tools to help with your personal finances such as spending wisely, etc.


Is Credit Karma Really Free?


In a nutshell, yes. Credit Karma really is 100% free. And so to answer the question, is Credit Karma a scam or not, here is what to know.

Unlike other credit score companies that claim to be free then ask for your credit card, Credit Karma does not at any time ask for a credit card – that is only if you want to use their free services.

When signing up for Credit Karma, you are asked for your social security number, which is typical by the way. However, if you want to take advantage of their other services such as free credit monitoring, subscriptions and what else have you, you do pay.

Even though Credit Karma offers free credit monitoring service which is to let you know when something fishy is going on with your credit, you do have to pay Credit Karma to find out what it is and how to fix it.

Anyway, some of these other companies only mean it’s free for the first month then after that, they make a monthly charges you are not ready  for. That is why they ask for a credit card in the first place.  Therefore, without your credit card, there is really no way credit Karma will be charging you, knowingly or unknowingly.


How Do they Make Money?


Is Credit Karma a Scam or else how do they make money? If it is free to receive credit Karma credit score, then how is it that they make money and run their business?  Credit Karma makes their money from ad-based offers.  They have numerous targeted ads that to be honest could be annoying. But if anything you are allowed to choose whether you would like to receive the offers or not.

Credit Karma believes that everybody should have free access to their personal data file.  It provides you resources to understand the health of your finances based on your personal credit file.

You all know how having a  good credit score is the best thing that can happen to you.  Because whether you want to apply for a car loan, house mortgage and even borrow money to start a business, you are judged or approved/disapproved based solely on your credit score. Anything else hardly matters!


Is Credit Karma Safe to Use?


Is credit Karma a scam? I guess, I have not answered the question yet…Doing  business online is risky, whenever you are dealing with your credit, the most important thing is privacy and security. Credit Karma can be said to be very safe and can only be identified using your social security number.

In addition to that, their accounts are read only, there is no credit card information to be stolen and they are independently certified by digicert.  There is really no Credit Karma scam to mention.


The Benefits of Using Credit Karma


TransUnion credit score and report- This is regularly update and you are able to see how the charges you make impact your credit score. You are also able to see how the score compares nationally, and are able to get an overall grade. In addition to credit score, you also get a report from TransUnion, updated weekly, and you can easily monitor it and correct errors at anytime.

Equifax credit score and report- Credit Karma offers the Equifax credit score as well.  With Credit Karma, you get free scores from two of the major credit bureaus, which both use they vantage score 3.0 model.  You will also have free Equifax credit reports.

  • The Credit Karma Tax filing – As of December 2016, credit Karma tax is available to help you file your tax returns for free.
  • Credit score simulator – this is one of the best features because you are able to simulate how taking certain actions can impact your score.
  • Credit factors report card – this is one of the useful features you get from Credit Karma.  You can see a grade on all the factors that go into making your credit report: payment history, credit utilization rate, total accounts, credit inquiries and derogatory remarks.
  • Free credit monitoring – With Credit Karma, you also get a free credit monitoring in addition to all these other benefits.


How Accurate Is Credit Karma?


By “accurate” most people want to know if the score they receive is accurate compared to those offered by FICO.  The experience may vary but Credit Karma also uses TransUnion and Equifax and if there would be a difference from that of FICO, it would be a 1% spread, which does not make that big of a difference.


Credit Karma Score vs. FICO Score


Credit Karma score is very different from FICO.  While Credit Karma is an independent website that among other things offers its users free access to their vantage 3.0 credit score. FICO is a credit scoring company and its eponymous scores are the highest vantage competitors.  So, which is one is better?  Well, neither, or more like the one that is free and updated more frequently.


Credit Karma Complaints


One of the most Credit Karma complains is that their credit score is not real FICO score. It is a vantage score 3.0 but what most people do not realize is that it is based on their actual credit report data.

It is good information because you get to know when your score is going up or down. The other complaint you will get about Credit Karma is that there are too many offers in the interface once you log in the interface.


Bottom Line: Is Credit Karma a Scam


By federal law, you are allowed to get your real free credit report from each of the three nationwide credit reporting companies on yearly basis.  This means every 12 months you receive your credit report without paying a single penny from TransUnion, Equifax and Experian.

However, you do have to request it through the annual credit report service which is the only source authorized by the federal government.

It is true Credit Karma offers free credit report. However it makes money by offering other tools and making suggestions to improve credit score based on your credit profile.

Is Credit Karma a scam? No! This is a useful service that should be given a try because you will be getting for free what other companies charge at a monthly fee. Free Credit Karma credit report is given when you use Credit Karma service.

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2 thoughts on “Is Credit Karma a Scam? The Ultimate Credit Karma Review

  1. I use Credit Karma to watch my credit and to make sure everything is “kosher” with it. So, I agree with you 100%. It is definitely not a scam, and so worth signing up an account with them if you care about your credit score. You can make sure all your credit information is correct, they have legitimate offers for you based on your credit, I can’t say enough good things about them!

    1. Good to hear. I had to check Free Credit Karma as it sounded too good to be true at first. It is important to have great credit history score and so is making sure that there are no mistakes on it.

      Anyway, now Credit Karma has introduced free Credit Karma tax filing…I am going to do a review on that as well.

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