Credit Karma: A Valuable Tool for Your Finances – Review

We’ve discussed credit scores here before.  You know how important they can be in your overall financial planning.   But how do you keep tabs on your credit without it breaking your bank?

Well, if you are looking for a free tool that can help you keep tabs on your credit situation, and gauge your financial progress, Credit Karma might be what you’re looking for.

What is Credit Karma?

Credit Scores

By visiting, you can get access to one free credit report each year from each of the three major credit bureaus.  However, you are only entitled by law to a free credit score under specific conditions.

It’s important to understand the differences between your credit report and your credit score, and it helps to know your score as well as see your report.

Credit Karma is one of several web sites that provide you access to a consumer version of your credit score.

In the case of Credit Karma, you are offered a version of your TransRisk score.  Credit Karma also offers you access to your Vantage Score as well as your insurance score.

Credit Karma doesn’t charge you for seeing these scores.  Instead, Credit Karma makes money from commissions from special offers.  The site gives you access to different deals and financial products.  When you buy through the Credit Karma site, the company gets a kickback.  These deals are specialized for you to help you maximize your finances.

You can also compare your situation with national averages.  Credit Karma can help you rank yourself among millions of Americans, and show you how you stack up.  You can look at your credit score, and use the tools on the Credit Karma web site, for free as many times as you want.  All without having to use a credit card (some credit score programs require a monthly fee or a credit card for the free trial period).


Credit Monitoring

Besides seeing a credit score you can also use Credit Karma for credit monitoring.  Their free program will email you whenever there is an important change on your credit report.  Why would this be useful?  Well, one thing this helps you monitor is fraud activity, including identity theft.

Account Monitoring

Enter your account information for things like credit cards, bank accounts, mortgages, and bills and you can monitor a bigger financial picture than just your score.

Financial Product Reviews

You’ll also have access to Credit Karma’s compilation of consumer reviews on financial products like credit cards, banks, mortgages, life insurance, and more.  Add your own reviews to help other people like yourself choose the best products.

How Useful is Your Score from Credit Karma?

The next question you have to ask yourself is how useful the score from Credit Karma actually is.

The truth is that there are a number of different credit scores, some of them based on the proprietary FICO scoring model, and others that aren’t.  Your TransRisk score is just one score that you have, as figured with information from your TransUnion credit report and using a specific algorithm.

In terms of whether or not it is the score that lenders and other financial service providers will use to determine your creditworthiness, the score you get from Credit Karma may not be particularly useful.  You might be better off paying for an “official” score from FICO if you are planning to borrow a large amount of money, particularly for a mortgage.

However, that doesn’t mean that Credit Karma isn’t useful.

Indeed, the web site can be a great resource for you to track your own progress.  You can get a general idea — from the direction your credit score is headed — of whether your situation is improving or deteriorating.  If you see a big drop in your credit score using Credit Karma, that might indicate a problem that needs further study.  Plus, the offers you find on Credit Karma might make sense for you to take advantage of in some cases.


Credit Karma can be a valuable tool for your finances, allowing you an idea of where you stand with your credit, and tracking your progress.  It can also be a part of your efforts to monitor your own credit, since dramatic changes in your score can indicate identity theft.

If you are planning on making a big purchase and need an official FICO score then Credit Karma isn’t the place for you.  But if you want an entirely free score that provides a good approximation as well as provides you credit monitoring and much more then take a look at Credit Karma.

Get started with Credit Karma.



Published or updated October 29, 2013.

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