What is Credit Karma?
Credit Karma is an American multinational personal finance company, established on March 8, 2007, by Ryan Graciano, Nichole Mustard, and Kenneth Lin. Credit Karma is presently one of the highly popular sites, offering its members credit score updates, monitoring services, and personalized advice on how to increase your score. It is not only well known as a free credit and financial management platform, but it’s also popular as a free tax preparation tool and a tool to identify and dispute credit report inaccuracies.
What does Credit Karma offer? Is Credit Karma Free?
Credit Karma provides free of cost weekly revised credit scores and credit reports from national credit bureaus TransUnion and Equifax, besides daily credit monitoring from the TransUnion. On a weekly basis, users can see updates to their credit scores on Credit Karma.
Also, Credit Karma provides credit tools, such as a Credit Score Simulator, which simulates the effect of potential financial activities on a user’s credit score; and tailored financial endorsements based on each individual user’s credit profile.
Apart from its free credit reports and tools, it offers a My Spending Tool through account aggregation service Yodlee, which lets users keep a check on their credit card, loan transactions, and balances in Credit Karma’s website. Also, Credit Karma hosts user forums for commercial product reviews and credit advice and offers calculator tools for debt repayment, remuneration, home affordability and easy loans.
In December 2016, the CEO announced Credit Karma Tax, a tax preparation online facility that would let the majority Americans to file their federal and state taxes at no cost to the filer. He also added that the service will have no extra or hidden charges.
What do You get with a Credit Karma Account?
Here’s everything you’ll get with your Credit Karma membership:
- Equifax credit report and credit score
- Credit monitoring
- VantageScore 3.0
- Credit report card to help identify weak areas in your credit report
- Credit score simulator shows how certain actions could potentially raise or lower your credit score
- TransUnion credit report, credit score, auto insurance score.
Who are the founders and investors of Credit Karma?
Kenneth Lin, who formerly founded Multilytics Marketing and functioned with E-Loan and Upromise, commenced Credit Karma in 2007, with the website going public in February 2008.
In November 2009, Credit Karma secures a $2.5 million Series ‘A’ funding round directed by QED Investors with involvement from SV Angel, Felicis Ventures and Founders Fund In 2013, Credit Karma acquired $30 million in Series B financing managed by Ribbit Capital and Susquehanna Growth Equity. In March 2014, Credit Karma up raised $85 million in Series C funding, ran by Google Capital with participation from Tiger Global Management and prevailing investors. The company followed that with $75 million endowments in September 2014 from Google Capital, Tiger Global Management, and Susquehanna Growth Equity.
Till date, Credit Karma has solicited $368.5 million in financing, at a valuation of $3.5 billion.
Does Credit Karma Hurt Your Credit Score?
Many people ask if obtaining your credit score from Credit Karma will your harm your credit score. The answer is NO. Seeing your credit scores on this website has absolutely no effect on your credit score at all.
How does Credit Karma make money?
How does Credit Karma give you a completely free of cost credit score when other services want to charge $20 a month or more? The answer is advertising. Definitely, much-targeted advertising based upon your financial habits. For example, if you have an outstanding credit, banks are happy to pay big bucks to target you with their finest loans and credit cards because it’s ultimately inexpensive for them over running generic ads to millions of people who may never qualify for their products.
If there’s a drawback to it, it’s the fact that, yes, they’re using your private credit data for advertising to you. It’s no distinct than Facebook using your likes to serve ads centered on your activities.
Is Credit Karma Safe?
Anytime you are trading with your credit, you want to assure your confidentiality is safe and secure. Is Credit Karma safe and secure? Undoubtedly – Credit Karma is immensely safe.
The Bottom Line
Credit Karma is an online personal finance platform that allows customers to check their credit reports and scores for free while offering them tools – and recommendations based on their credit profile – to improve them. No matter how it turns out down the road, for now, it is an amazing deal for people handling their money.