Credit Karma Review

Today we review one of the biggest names in credit score monitoring - Credit Karma. Are they legit? How do they monitor scores? Are their credit scores accurate (spoiler: no) & more!

Credit Karma Review

Want A New Credit Card?

We've collected the best credit card deals around! Whether you want the best travel rewards card, cashback card, a 0% interest balance transfer card, no annual fee or amazing business perks, use the links below and jump straight to our winners.

About Credit Karma

Quick Information

  • Name: Credit Karma
  • Business Category: Credit Reporting and Monitoring
  • Address: P.O. Box 30963, Oakland, CA 94604
  • BBB Rating: C+
  • Total number of complaints: 1,801 complaints closed in last 3 years; 1,107 complaints closed in last 12 months
  • Customer Reviews: 1.7/5 stars based on 475 customer reviews on Trustpilot
  • Years in Business: 14
  • Number Of Locations: 1
  • Number of Employees: 1,500+
  • Alternate Business Name: None.

What is Credit Karma?

Credit Karma is an online credit monitoring service founded in 2007 which provides users with free access to their credit scores, credit reports, personalized financial recommendations, and claims to have over 100,000,000 members using their product.

On CreditKarma, users that sign up can get access to their credit scores and credit reports from two major credit bureaus, Equifax and TransUnion.

Note, there is no access to Experian on their platform!

While their service is free to use, they make money by earning commissions from partner products (credit cards, insurance, loans, .etc) that users apply for through the program.

How does Credit Karma work?

When you sign up, they give you free access to your Vantage 3.0 credit score and credit reports from two major credit bureaus, Equifax and TransUnion right in your dashboard.

NOTE: All screenshots are from my actual Credit Karma account.

In my opinion they have one of the slickest looking user interfaces (UI's) in the industry. The site is very easy to use and I quickly understand at a glance everything that's going on with my credit score.

That's about all you can ask for, really. Give me easy and efficient any day.

Oh, and as I'll explain shortly, their credit score (Vantage 3.0) is NOT a FICO score. My actual FICO score is 756. That's how far off Vantage is, but I'm willing to show it anyway.

What services does Credit Karma offer?

Credit Karma's Credit Score Simulator can help users understand how different financial decisions may impact their credit score.

The simulator allows users to adjust different factors and see how their credit score may change as a result, and quite honestly, I like playing around with this. I do the same over at Capital One. Tweak it a bit, look to see how I can increase my score and put that into action

They also provide personalized recommendations for credit cards and loans that you may be eligible for. Users can compare offers from different lenders and applying directly is easy, just like it is at SavingsHackers!

Credit Karma's Identity Theft Protection service monitors users' credit reports and alerts them to potential fraud or identity theft. The service also provides up to $1 million in identity theft insurance coverage (read the fine print, though).

Credit Karma offers free tax filing services, including federal and state tax returns for individuals and small business owners.

And if that wasn't enough, they also offer high-yield savings accounts and car insurance quotes from multiple providers.

What factors affect credit scores on Credit Karma?

Ok, so let's get this straight. Credit Karma isn't a type of credit score, nor are they a credit bureau. In fact, they don't even give you your FICO score! is simply a service that shows your Vantage 3.0 score (also called a "Fako", which lenders legitimately never use and has very little real-world value) and allows you to monitor your credit report.

The score they provide is NOT a FICO score and has little-to-no value in the real world beyond estimating your FICO, and if we're being totally upfront - it's not very good at that, either.

As I explained above, Vantage 3.o is literally 53 points lower than my actual FICO score!

The entire lending industry uses FICO scores, Credit Karma does not provide you with access to this score, and for that reason the Vantage score is useless in that the score itself has absolutely no meaning relative to the score lenders actually use (a FICO score).

How much does Credit Karma cost?

It’s 100% free to you (the consumer) which is nice. I like the credit monitoring service. I could personally care less about the Vantage score since lenders don't use it and it's not terribly accurate.

How Does Credit Karma Make Money?

The same way all of the financial sites do (including this one), they offer links to credit instruments, like credit cards, and receive a commission from the partner products & services they recommend.

It's really one of the best business models on Earth and creates a win-win for both the consumer (You!) and the business. Consumers never pay a dime, the company (CreditKarma in this case) makes a commission and the financial product (ex. American Express) gains a new customer.

Credit Karma Reviews

Data current as of February 28, 2023, Credit Karma has an average rating of 1.7 stars out of 5 on Trustpilot with a total of 475 reviews.

1. Nicole from the US

Rated 1 out of 5 stars

Date of review: February 17, 2023

DONT EVER OPEN CREDIT KARMA MONEY. THEY WILL JUST ALLOW YOU TO WITHDRAW 1000/ DAY so large amount of money that you deposited in that account will really be, i really need more than 1K to pay something. I cant pay it today because CK is not giving me my money!!!!! so what i did, i closed my account so all my money will be in my other bank where I wil be able to use it like i lawfully should be able to!!!!!

2. Echezona from the US

Rated 2 out of 5 stars

Date of review: February 15, 2023

Credit karma doesn't have correct information. My credit score was 97 points difference on credit karma vs. The real website for TransUnion. 97 points is a big deal. Here I was trying to get my credit to be better and I learned it was so far off when I applied for credit and the company I applied with showed me what my true credit score was. I won't believe the information on Credit Karma again.

3. Robert Barbera from the US

Rated 1 out of 5 stars

Date of review: February 12, 2023

Credit karma has a guarantee that they would pay me $50 if I was declined for a personal loan. Well I was declined and it's taken months to get $50 and 8 or 9 emails with them. They already have a $3 million fine against them from the FTC. I'll never get my $50. It's just a scam to try and get you to open some kind of checking account with them.

One of the biggest issues with reporting companies, whether it's TrustPilot, Yelp or the BBB, is the fact that you're dealing with opinions. You're also only getting one side of the story in most cases.

What we like to do when taking company reviews into account is to throw out all of the 1 star reviews and all of the 5 star reviews and see what we're left with. 1 star reviews are notoriously skewed and 5 star reviews can seem borderline fake, or planted by the company.

2 star reviews carry a lot of weight if factoring the downside. It's a more thoughtful decision to say "We liked it enough not to completely trash it with one star, but here are the issues we had." For the upside, 3 & 4 star reviews are right in the perfect zone.

If you look at a 3 star review like a middle-ground and a company has more of those than 2 or 4, it's probably a fair review. 4 star reviews are just like 2 star reviews in the sense that they carry the most weight at the top level.

With a 4 star review you tend to get a little less detail than a 3 star review, but a more positive tone overall, and since they didn't automatically vote 5 stars, it's typically safe to assume that "while there are a few areas that could be improved, overall this company is great"

Credit Score Monitoring and Reporting

How does Credit Karma monitor and update credit scores?

OK, let's split this into 2 areas.

1.) Credit Scores.

2.) Credit Reports.

1.) monitors activity on your credit report by pulling this information from the 2 bureaus it works with (Equifax & TransUnion), and by doing so can alert you to any changes.

2.) This credit report also gives the data it needs to calculate your Vantage score (which is worthless, as stated above) and gives you this total on a weekly basis.

How accurate is Credit Karma's credit score reporting?

It's not accurate whatsoever, because it's not a FICO score. Lenders use FICO, not Vantage, so the credit score provided by CreditKarma is not valid for anything you would ever use or need a credit score for.

I can't overstate this. A Vantage credit score is worthless.

A credit report, however, is not, and for this reason CreditKarma has a lot of value for consumers.

How often are credit scores updated on Credit Karma?

CreditKarma updates weekly, which is beneficial, but again, the credit score is meaningless. It's the credit report and monitoring that has value and we can't recommend consumers taking advantage of real-time credit monitoring enough.

It's absolutely imperative that you're monitoring your credit report. There's plenty of free services, so there is no excuse to not be monitoring.

Can Credit Karma affect credit scores?

Credit Karma's credit score monitoring does not affect credit scores as they simply show the score and do not make hard pulls.

What factors affect credit scores on Credit Karma?

Credit Karma considers a variety of factors when calculating their Vantage credit scores, including payment history, credit utilization, age of credit history, types of credit, and recent credit inquiries.

Overall the Vantage is similar to a FICO in the sense it uses a lot of the same ranking criteria, but again, it's not a FICO score so it doesn't really matter. Take those numbers with a grain of salt.

Credit Score Simulator

What is the Credit Karma Credit Score Simulator?

Ok, so I've trashed on CreditKarma's use of the worthless Vantage score, but what about their credit score simulator.

Well, that's a different story, because a credit simulator shows the impact that specific actions can have on a score, and this translates fairly well from Vantage to FICO.

As you can see above, there are 12 categories you can choose from to evaluate a potential increase or decrease to your credit score from specific events.

  • Get A Loan: What happens to your score if you add a new loan to your account? (this is also called a "trade account") Click on this and enter the details to see.
  • Open A New Credit Card: This is also a new trade account, and works exactly like the loan feature above, except it uses a credit card.
  • Transfer Balances To A New Credit Card: If you have debt on a high-interest credit card you may be looking to transfer the balance to a new 0% APR credit card. Take note, often you're opening a new credit card in this process and in some cases, people chose to cancel the previous card. Those are 2 big changes to your score.
  • Close My Oldest Card: It should be pointed out that you need to weigh this decision very carefully. Closing your oldest line of credit can be devastating to your credit score because it lowers the average age of accounts, a big factor in your score.
  • Have A Credit Application Denied: If you've recently applied for credit, whether accepted or denied, you had a hard pull on your account and your score dropped by around 2 points. It doesn't matter whether you were denied or approved, the hard pull still deducts points. This tool gives you a chance to check what would potentially happen to your score before you go and apply.
  • Get A Credit Limit Increase: This is a positive event. You typically want credit limit increases (CLI's) whether you use them or not. It shows that lenders evaluate you as a good risk, and this is one of my favorite filters in the tool because it's the one of 2 positive factors that you can control quickly.
  • Increase Or Decrease Balances: Another fun filter to play around with, and absolutely important to understand. Decreasing balances have a positive effect, increasing balances have a negative effect. This tool will give you a good idea of how much it will take to raise your credit score by paying off a balance to a specific amount, and how much your credit score will likely drop if you increase your balance. This is my second favorite tool because you can see some very dramatic score increases by paying off debt, and sometimes you want to know exactly how much you need to pay to hit a specific score (like 700 for instance)
  • Let My Accounts Go Past Due: It probably doesn't need to be said, but this is a very negative factor for your credit score. It's not the worst, bankruptcy is the worst, but this is pretty bad. I personally don't use this tool because I never, ever want to pay late, however, it happens to millions of people so as a warning you may want to look at what would happen if you did miss a payment.
  • Wipe Out My Late Payments: Keep in mind this is not a manual thing you can do, at least not unless the late payment is inaccurate. Only time will allow late payments (which usually includes the entire account; if closed) to fall off your record. If you have a late payment on your file and it's been 7 years since the record was first reported, you're probably counting down the days - if so, this tool can help you estimate the positive increase to your score.
  • Go Into Foreclosure: Again, another very negative tool, however, some people need it. If you're about to go into foreclosure, you can get an estimate of how that will impact your score. Keep in mind, typically people that go into foreclosure end up missing payments on other bills, or have already missed a lot of payments and may even file for bankruptcy, so in this case, as you can probably imagine, your score will be severely impacted. You could potentially go from 800 to 500 with major defaults like this.
  • Have My Wages Garnished: This is another negative event. When your wages are garnished it can be for a few reasons, such as a court-ordered repayment for child support or a similar judgement, or taxes. The IRS is known to garnish wages and when this is filed it can definitely affect your credit. If you believe this could happen to you, it might be worth checking the tool to see how it might impact your score.
  • Have An Account Sent To Collections: If you thought late payments were bad, this one is going to blow your mind. Once an account goes into collections, the original trade line will show that you did not pay as agreed (which is terrible in its own right) and then you will have another record showing a collections debt. You can imagine this is not a positive event. If you think you might be sent to collections and you can't avoid it, have a look at this filter to see how it could change your credit score.

How does the Credit Score Simulator work?

Well, we can argue all day about it "working", because again, the Vantage score is not even a legitimate credit score lenders use. The way the Vantage score works is not the same as FICO, the weighting is slightly different, so if you're relying on the FAKO score (Vantage) for something as important as a mortgage, you could be in for a shock when you see what you FICO is!

How accurate is the Credit Score Simulator?

To be brutally honest here, it's not even that accurate for Vantage. That doesn't mean CK doesn't offer legitimate versions of a credit score, it's just not the credit score that lenders use.

For instance, I've peresonally seen plenty of instances where CreditKarma's score would say X would happen (+/- points) if I made Y change (such as paying down a balance, opening a new card, opening a new credit line, .etc) and it was completely off.

...but again, it barely matters. Lenders have no use for this score so neither should you except for approximating what your FICO score might look like.

Credit Card and Loan Offers

What credit card and loan offers does Credit Karma provide?

Whichever bank has the best payout? I'm kind of kidding. The reality is that CK promotes credit cards that are profitable to them and those that you are likely to get approved for.

It's a win-win, really.

I will give their approval estimates an A+ because in the past they've recommended cards to me, cards I didn't even think I qualified for and I did, so they have some kind of crazy good algorithm there.

Then again, they do have all of your credit data and a long history of fine-tuning their algorithms so it's not a surprise at all they would know if you're eligible for a specific credit card.

How does Credit Karma recommend credit cards?

I honestly don't know, because that's the nature of an algorithm. I can guess, but it's a private piece of software that makes thousands of calculations based on your likelihood of being approved for a specific card.

Truly, they're very good at this.

What factors does Credit Karma consider when recommending credit cards?

They aren't publicly open about this, but if I had to guess, it's all of the same criteria that a lender (or bank) would look at.

  • Credit score
  • Income
  • Debt-to-income
  • Age of credit
  • Derogatory accounts
  • Payment history

It really only takes the credit score to know if someone can potentially be approved (and no, they aren't always right on their recommendations) so if you apply a little bit of algorithmic magic (and maybe direct access to a bank for pre-approval?) you'll have really good recommendations.

How accurate are Credit Karma's credit card recommendations?

If I was to pull a number out of thin air, I'd say 9.5 out of 10. I think of the 3 cards I applied for I wasn't accepted for 1 (I knew better, they have VERY specific rules for this card) and if I hadn't have done that it'd be 2 for 2 (100%)

There probably aren't a lot of misses on these recommendations. CK isn't going to make money if you don't get approved. It's in their best interest to recommend cards you can actually qualify for.

Pros and Cons

What are the advantages of using Credit Karma?

I personally use Credit Karma for monitoring (and MANY other free credit monitoring services), so IMO they do an awesome job at reporting changes to a credit report and giving me a rough estimate of what my credit score might look like.

For obvious reasons (it's not FICO) the score doesn't really matter much, but it's relatively close and I can track directional changes (up or down) which is helpful.

What are the disadvantages of using Credit Karma?

You could probably get a laundry list of disadvantages to using any company, but since this is my article and I use the service I can only think of one.

A Vantage 3.0 score is not a FICO score.

That being said, the services that Credit Karma provides go well beyond score estimation and the monitoring service alone is a great value add. I really don't see any disadvantages unless they were hacked, but that can happen anywhere.

How does Credit Karma compare to other credit score monitoring services?

It's basically identical to others, that's why I use others. In fact, I've noticed WalletHub is actually faster at reporting credit inquiries (hard pulls) on my report. Almost real time.

Trust and Legitimacy

Is Credit Karma a legitimate service?

Yep. They're definitely legit. I'll recommend them even though I compete with them across the same financial verticals (credit cards, insurance, loans, .etc) because if there's one thing I believe, consumers should have all of the options possible.

Whether that's Credit Karma, WalletHub, or MoneyMingo, use them all, because they all add value.


  1. Consumer Financial Protection Bureau
  2. Federal Trade Commission
  3. myFICO
  4. Experian
  5. Equifax