Are Free Credit Reports From Credit Karma Really Free?

I almost never watch TV in the morning during the week but this morning was one of those rare exceptions.  I think I turned it on simply to see what time it was since I didn’t have my phone next to me so on went Sportscenter for a few minutes.

And I saw an interesting commercial for a website called Credit Karma.

I couldn’t find a link to the commercial anywhere online but here’s their official Youtube Channel – they may upload it in the near future.

It was clearly a dig at services like FreeCreditReport.com as you can get a free report from them but then the onus is on you to cancel or you get automatically enrolled in their credit monitoring services (whatever the heck they’re called) and they just ding your credit card or bank account every month until you do take the time to cancel.

Credit Karma promised they weren’t going to do that which I knew would interest you if it turned out to be legit.

So I decided to do some poking around to figure out what the heck they were up to.

Is it really free?

As it turns out – yes.  They will provide you with a free credit score from TransUnion.  Yes, it only comes from one of the three major credit reporting bureaus and scores can vary up between each bureau but it is good free resource.

I learned first hand how much credit scores can vary a few years ago.  I was looking to get a loan for a new motorcycle (not a good thing to borrow money for, but this was before I became money savvy) and wasn’t approved at the dealership.  They sent me to the credit union and the credit union not only approved me, but I got their best rate as they only checked credit scores from one bureau and that happened to be the one bureau that rated me as having a high credit score.

So having just one credit score isn’t perfect, but it’s a lot better than nothing – If you’re looking to get two out of the three, the website Quizzle is a completely free resource for getting your Experian credit score.

I’m not aware  of any completely free service that will give your your Equifax credit score, but keep in mind that you can get your credit report from them directly for free once a year to make sure there aren’t any negative remarks.  If your information is accurate, then your credit score with Equifax will be similar to Experian and TransUnion – the key is to make sure that nothing is amiss.

How Does Credit Karma Earn Money?

Since we all know they’re probably not giving your credit scores for free out of the goodness of their heart (though by having “karma” in their name, they do sort of imply that), you’re probably wondering how they earn money?

My first though is that they sell your information to third parties… as it turns out that’s not the case – Credit Karma guarantees they won’t share your information with anyone else without your explicit permission.

They earn their money through advertising (like Google and Mint).

They also have user reviews of credit cards.  Unlike CreditCards.com and similar sites they don’t actually do their own reviews, they merely syndicate reviews from card holders more like Amazon does with their products.  Amazon provides the details of the products and lets customers do the actual reviewing.  It did look like they do earn revenue from some of the credit cards featured on the website.

Their earnings disclosure simply says “This site may be compensated through third part advertisers.”

So there you have it, a completely free alternative for getting your credit score for free without having to take some kind of free trial that you’ll just have to cancel later.

Save yourself the hassle and just use Credit Karma and Quizzle.

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