Credit Karma Review: Free Credit Score and More at Your Fingertips

Credit Karma is a website and app where the primary feature is free access to your credit score any time you want to see it. However, there is so much more to it than that.

We’ve explored everything that Credit Karma has to offer — including resources for your car, tax preparation and even a savings account — to help you decide if it might be a good fit for you.

How to Use Credit Karma for Free Credit Scores and Beyond

Credit Karma is free to sign up for, which at least partially explains why they claim to have more than 100 million members and counting.

Another reason is the breadth of services Credit Karma provides at no additional cost. Put those things together and you know money expert Clark Howard is a big fan:

“What’s fantastic about Credit Karma is their entire suite of free services,” he says. “You’re able to monitor your score, monitor your credit and know — before you even apply — the likelihood of you being approved for a loan.”

Let’s take a closer look…

Table of Contents: Credit Karma Review

• Signing Up for Credit Karma
• Using Credit Karma to Check Your Credit Score
• How to Get Your Credit Report
• Using the Auto Tools
• Using the Tax Services
• Using Credit Karma Savings
• Other Useful Products and Services

Signing Up for Credit Karma

The first thing you’ll want to do if you’re not already a Credit Karma member is to sign up for the service. This is a three-step process that involves:

• Creating an account
• Providing some information about yourself
• Confirming your identity

The information you’re required to share in order to join is:

• Name
• Address
• Date of birth
• The last four digits of your Social Security Number

This data is required in order for Credit Karma to access your credit reports, which is necessary to provide you with your free credit score.

Note: If you have taken Clark’s advice and frozen your credit with the three major credit bureaus, you will need to unfreeze it with TransUnion and Equifax in order to use Credit Karma. You can freeze your credit again after you sign up and the service will work going forward.

The final step of the sign-up process is to confirm your identity. In order to do this, Credit Karma may ask you a series of questions about former addresses and various credit or banking accounts.

If you are able to answer these questions, you should be successfully signed up for the service.

Using Credit Karma to Check Your Credit Score

Most people know Credit Karma as a place to check your credit score whenever you want to for free. As such, this is the information that the site or app displays on your “Dashboard” as soon as you log in.

As you can see, the site displays two different scores, one based on your TransUnion credit report and one based on your Equifax credit report. Credit Karma calculates your score using VantageScore 3.0, which they explain like this:

“VantageScore 3.0 is a credit scoring model. It takes the information in your credit report and turns it into a score. There are many scoring models out there, including ones from FICO and other companies. Each one calculates your score a bit differently, but they all use information from your report.”

You’ll also notice that the two scores can be different. That’s because the credit reports from the two bureaus can contain slightly different information at any given time depending on when various creditors are reporting to them.

One really useful tool the site offers is a “Credit Score Simulator” which you can access by scrolling over the “Resources” tab on the top menu.

With the Credit Score Simulator, you can see how your credit score would likely change if you were to take any number of actions, including:

• Getting a new loan
• Opening a new credit card
• Transferring balances to a new card
• Closing your oldest credit card
• Having a credit application denied
• Getting a credit limit increase
• Increasing or decreasing your balances
• Letting accounts go past due
• Going into foreclosure
• Having your wages garnished
• Having an account sent to collections

Playing around with the simulator can give you a good sense of how much these activities affect your credit score as well as which actions you could take to improve it — and by how much.

How to Get Your Credit Report

Knowing your credit score is a big part of having a grasp on your overall financial situation, but in order to fully understand your score, Clark says you really need to check your credit report at least once per year. Credit Karma is one of a handful of places that lets you do that for free.

Credit Karma gives you access to your reports from both TransUnion and Equifax and will even highlight important information to make the reports easier to understand. Your reports can be updated once a week and you can check them as often as you want.

To access your credit reports, just click on either one of the credit scores you see in your Dashboard. You’ll see the report from whichever bureau you selected, along with the option to print the report.

Using the Auto Tools

While not as robust at the credit score and report offerings, Credit Karma does offer some tools when it comes to your vehicle.

You can access these by clicking the “Auto” tab on the top menu.

Click on “Go to my auto profile” and you will see a page with any vehicle or vehicles Credit Karma has associated with you.

From your auto profile page, you can:

• See the balance on an auto loan you may have
• Check to see if refinancing your auto loan could save you money
• See the current estimated value of your vehicle
• See any current recalls for your car
• Check auto insurance rates for someone with your profile

Credit Karma also partners with Vroom to let you shop for and finance a used car online, or you can get a quote for selling your current vehicle.

Using the Tax Services

Another more recent offering from Credit Karma that has garnered a lot of attention is the tax filing services.

The site allows anyone, regardless of income, to file both federal and state returns for free.

If you file your taxes with Credit Karma, the site offers two protections for peace of mind:

• Accurate Calculations Guarantee: If the IRS and/or your state imposes penalties and/or interest on you due to a calculation error, Credit Karma will reimburse you up to a maximum of $1,000.
• Audit Defense: If your return is audited by the IRS or your state, you’ll get support from a tax preparation professional who can help you respond to their inquiries and explore your options. They will “identify documents that need to be collected, assist with organization of the documentation, prepare a professional response portfolio, and review and discuss it with you before sending to the taxing authority.”

If you’ve been using Turbo Tax or another service to file your taxes for “free” only to find yourself nickeled-and-dimed for additional services, Credit Karma Tax might well be worth a look.

Using Credit Karma Savings

Finally, the latest addition to the Credit Karma suite of products and services is Credit Karma Savings. This is a free High Yield Savings Account which is currently paying around 18x the national average. Credit Karma partners with MVB Bank to offer these FDIC insured accounts.

While the APY on Credit Karma savings isn’t quite as high as some of the other high yield savings accounts out there at the moment, it could be an attractive option if you are already comfortable with the site as a place to get a snapshot of your current financial situation.

Other Useful Products and Services

While the purpose of this article is to highlight aspects of Credit Karma that people will likely find to be the most useful, there are some other things the site offers that you might find intriguing:

• Credit card offers: Browse current credit card offerings based on a number of different categories, including best overall, balance transfers, rewards and cash back. Credit Karma will let you know your likely approval odds for each card based on your credit profile. We should note that this is one way the free site makes money — they get a cut if you are approved for a card you apply for through them.
• Loans: Get personalized estimated interest rates and approval odds on personal, home and auto loans. This is another way the site makes money — through their affiliation with the companies offering these loans.
• Identity monitoring: Check to see if you have credit freezes in place at Equifax and TransUnion, and see if the email address you used to sign for Credit Karma has been involved in any data breaches.
• Unclaimed money: This might be our favorite minor feature. If a business owes you money but can’t find you, it may turn the money over to the state. Credit Karma will search your state’s role of unclaimed cash and let you know if you need to file a claim for some of it. See more ways to find and claim missing money in your name here.

Final Thought

The old adage “you get what you pay for” doesn’t really apply to Credit Karma. If you thought it was simply a place to check your credit score, you might be missing out on a host of other beneficial features the site offers. But even if the credit score check is the only thing you ever use, Credit Karma can be an important resource in your financial toolkit.

More Credit Stories on Clark.com:

• How to Get a Free Credit Report
• Why You Don’t Need an 800 Credit Score
• What Is a Good Credit Score?