How Credit Karma Works? All You Need to Know

Credit Karma provides customers with access to credit scores and other credit data. Users are not required to register with a credit card. To access Credit Karma’s information for free as often as they like. In contrast, the three major credit bureaus only give consumers access to their total credit scores for free once a year and charge a fee for additional requests.

Based on your credit information, it recommends financial products like credit cards and earns a commission. Suppose you decide to purchase the suggested item. The fintech company recently expanded its services by offering free tax preparation assistance and a high-yield savings account thanks to a partnership with MVB Bank.

Credit Karma’s work field

It is a company that provides fintech services. Credit Karma and its direct competitors do not sell your data to outside parties, unlike some businesses in the industry. It provides credit scores and directs users on what to do after accessing their initial credit report. For instance, based on each customer’s likelihood of approval, the business recommends credit cards that are tailored to them. Based on income and credit scores, it offers users advice about specialized personal, home, and auto loans.

Because they also offer free credit score information and financial tools, its competitors include NerdWallet, Credit Sesame, and Mint.

Financials and Fundraising 

As of February 2021, Credit Karma had more than 110 million users across the United States, Canada, and the United Kingdom. It raised $868 million through 8 funding rounds, the most recent of which was in March 2018, according to Crunchbase. At that time, the company had a $4 billion market value. Two of its principal backers are Silver Lake Partners and SV Angel.

History and Leadership

Based in San Francisco, it was established in 2007, and in 2008 it provided its first free credit reports. The company was started by Ken Lin, the current CEO, who spent his early years of employment at E-Loan, an online lender specializing in debt consolidation, and UPromise, a subsidiary of student loan service Sallie Mae that runs a customer loyalty program focused on saving for college and paying off student loans.

Credit Karma announced in October 2020 that it would start providing checking accounts to customers who already have savings accounts with the business.

How Credit Karma reports Diversity & Inclusivity

We give investors a peek into Credit Karma’s transparency and dedication to diversity, inclusivity, and social responsibility as part of our effort to raise investor awareness of the value of diversity in businesses. We examined the information that Credit Karma provides. It shows that it conceals all information about the variety of its board of directors, C-Suite, general management, and the entire workforce. Additionally, it demonstrates that Credit Karma hides its diversity in terms of race, gender, ability, veteran status, and LGBTQ+ identity.

Should I use Credit Karma or not?

It is an excellent way to view your credit score for free if you plan to buy a house soon. Use it to track your credit score over time and ensure it rises if you consider purchasing a home in the future. When it finally rises above 740, you can confidently apply for a mortgage that you’ll receive the best terms from the lender.

You can also check your credit report for any incorrect information that might lower your score using Credit Karma accuracy.

How Does Credit Karma Work


  • The service is free.
  • You can continuously keep an eye on your credit report and score.
  • It’ll detail how your credit score operates.
  • It will offer advice on raising your credit score, which is essential for obtaining a prime loan.
  • Their data is very securely encrypted, while your data is safe and never sold to outside parties.


  • The data is gathered once a week so it might be less current.
  • Your FICO score may differ slightly because it is not the industry standard.
  • Only two of the three credit reporting bureaus are compatible with it.

Can you trust Credit Karma?

TransUnion and Equifax, two of the three major consumer credit bureaus, provide the credit scores and reports you see on it directly. The credit scores and information you view on Credit Karma ought to accurately reflect the data that those credit bureaus have provided about you.

Does Credit Karma hurt your score?

It doesn’t harm your credit to check your free credit scores on Credit Karma. These so-called soft inquiries have no impact on your credit score. A lender will typically conduct a complex examination (also known as a “hard pull”) while evaluating your application for a financial product.

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