Your credit score is a very important financial number and, before recently, you had to buy your score, either through MyFICO, one of the major credit bureaus, or a third party.
You’ll see “free credit score offers” around the internet, but they most of them require you to enter your credit card number for a trial subscription to a credit monitoring service. Forget to cancel your free trial and your credit card will get charged.
Kenneth Lin, founder and CEO of Credit Karma, believed you should have access to your credit score absolutely free, without a credit card or tricky subscription cancellations. In March 2008, he made it happen.
Absolutely Free Credit Scores
Credit Karma allows you to get a free credit score with absolutely no obligation. You don’t have to enter a credit card number. You don’t have to subscribe to a credit monitoring service. The credit score is absolutely free. I've used it for several years and have never paid anything to view my credit score.
If you’re new to Credit Karma, you can sign up to receive a free credit score in less than two minutes. After you’ve signed up, you can continue to get a free credit score everyday, forever. Lin tells me Credit Karma will never charge you for your credit score. Instead, Credit Karma has partnered with advertisers who offset the cost of providing you a credit score.
FAKO Score, Not FICO Score
The one drawback to Credit Karma's free score is that it's not a FICO score, the one most widely used by lenders. Even though it’s not your FICO score, it gives you a picture of your credit standing based on your TransUnion credit report.
Since 2008, Credit Karma has expanded their services to include free daily credit monitoring, a VantageScore, and an Auto Insurance Score.
Credit Score Simulator
A personalized simulator that tells you how certain actions will affect your credit score. Thinking about applying for a new credit card? Credit Karma will tell you how an additional inquiry will affect your credit score. Paying off a credit card balance? See how much your credit score will increase. The simulator will let you choose among the most popular actions with credit limits, payments, and public records to see if your credit score will go up or down.
A credit score comparison that lets you compare your credit score to other consumers in a similar demographic.
Other Credit Information
In addition to credit score information, you can also find details about your debt accounts, including the amount your balances increased or decreased since your last update. Credit Karma can also recommend the credit cards you're most likely to be approved for based on your credit standing.
The Credit Report Card gives you a letter grade A-F in the following areas: Overall, Utilization, On-Time Payments, Average Age of Open Accounts, Total Accounts, Hard Inquiries, and Derogatory Marks. These grades can help you evaluate the areas, if any, that are hurting your credit score.
Since I started using Credit Karma in 2008, it has evolved from a website to check your credit score to a tool to help you improve your credit and assess your debt.