Are Sites Like Credit Karma Really Free?

Is Credit Karma legit? Yes, and you'll get a free credit report.

There are a lot of factors that affect a person’s credit. These include your previous payment history, how often you use your credit, how long you’ve had credit and the types and amounts of credit you currently have outstanding. With so many moving parts, it can be hard to gauge where your credit score stands. Sites like Credit Karma take out the guesswork by providing consumers with a complimentary credit report. Learn how Credit Karma makes money.

How Credit Karma Works

There is no Credit Karma scam and users are under no obligation to purchase anything in order to receive their credit score and complimentary report.

Sign up by providing your email address and creating a password. In order to identify yourself, you must enter your name, address, date of birth and social security number. The last step before receiving your report is to confirm your identity and agree to the terms of service.

Once you’ve submitted your information, Credit Karma will provide you with the following three things:

  1. Your credit scores from TransUnion and Equifax.
  2. Your credit reports from TransUnion and Equifax.
  3. Credit monitoring to keep you up-to-date on any changes that might affect your score.

Related: Who Looks at Credit Scores?

How Does Credit Karma Make Money?

Why is Credit Karma free? Credit Karma uses the account holder’s information to make recommendations on products and services that Credit Karma has determined would most benefit the account holder.

Consumers are under no obligation to follow through on the recommendations but when they do, Credit Karma is paid for the referral. For example, after signing up you might receive an email with credit card recommendations. If you decide one of those credit cards fits your needs and you apply and are approved for it, the credit card company would then pay Credit Karma for the referral.

Other Credit Reporting Services

When deciding whether or not to use Credit Karma, it can be helpful to compare it to other credit reporting services.

  • AnnualCreditReport: This service is required by federal law. It gives customers a complimentary credit report from all three of the major credit reporting agencies. However, it only allows you to request this information once each year and it doesn’t provide you with your credit score.
  • GOFreeCredit: During your one-week $1 trial, you’ll be able to view your TransUnion credit score and credit report. When the trial period ends, you’ll also be able to view your Experian and Equifax credit reports. Use GOFreeCredit to get easy access to your credit report from all three reporting agencies.

The Final Word

Yes, Credit Karma is free, but it’s just one option out of many when it comes to monitoring your credit report. No matter what monitoring service you end up using, make sure to keep a careful eye on your score. Whether you want to check on the status of your credit before applying for a mortgage, or you simply want to make sure your credit report is error-free, it pays to review it.

Up Next: How to Read a Credit Report

GOBankingRates.com and GOFreeCredit.com are both owned by ConsumerTrack, Inc., an online marketing company serving top-tier banks, credit unions and other financial services organizations.