CREDIT KARMA: Review, How Does Credit Karma Earn(+All You Need to Know)

Credit Karma
Image Credit: WalletHub

If you are seeking a platform that offers all kinds of products and services to help you manage your finances. Here is credit karma for you. Many people have been wondering if Credit Karma tax preparation is ideal for those who want to easily complete and file their tax returns. Today am going to answer a few frequently asked questions by its members. Such questions include; what is credit karma, how credit karma works, update, earn, as well as how to delete an account

What Is Credit Karma?

Credit Karma is an American multinational personal finance company founded in 2007 by Kenneth Lin, Ryan Marciano, and Nichole Mustard that provides its members with personalized recommendations for credit cards and loans. They are seen as a broad website that offers its users the chance to build a better financial future. Thus, reducing marketing inefficiency for banks. They have also been able to scale at pace while furthering its founding mission to help people take control of their financial lives.

This company gives you a free credit score and credit report in exchange for information about your spending habits. These scores and credit report information are mostly from TransUnion and Equifax, two of the three major credit bureaus. They also compile their own VantageScore based on that information. Your Credit Karma score should be the same or close to your FICO score, which is what any prospective lender will probably check.

Also note that your information will accessed from TransUnion and Equifax, which are two of the three major consumer credit agencies. Then the third which is Experian will come up with its own independent rating based on VantageScore giving you your current VantageScore rating. Besides this is a free service, it has other related services, such as a security monitoring service and alerts for all new credit checks.

Credit Karma Sign up

 Using your phone or computer there are just a few easy steps to sign up with Credit Karma

  • Download and install apps from play store or visit their official website.
  • Click on the sign up button
  • Create an account with your email address. Let your password be strong as well.
  • Pick a security question
  • Provide your personal information
  • Enter the last four digits of your Social Security Number. Note that the first five numbers are hidden from your view, enter the last four digits on your screen. Click on the blue “Next step” button for the final page to load.
  • Additional data about you will be required. Fill them up and click the submit button

However, in some cases, signing up process might differ. All you’ve got to do if following the steps on your screen.

Read Also: Personal loan application: Step by step guide (+ quick tips)

Advantages of Credit Karma

  • Credit Karma is free.
  • It has a favorable user experience.
  • It has great suggestions for fixing problems with your credit.
  • They pull their data from third-party resources.
  • Once credit karma has your personal information, you can search for personalized offers for a credit card, a car loan, or a home loan.

Disadvantages of Credit Karma

  • Like in any other financial business transaction, You will surely get intrusive financial recommendations.
  • You can’t change the auto-logout setting.
  • Sometimes it only shows you two of your credit scores.

VantageScore and FICO

VantageScore isn’t the same as FICO. They are the two biggest competitors in the business of creating scoring models that are used to rate the creditworthiness of consumers. They both update their models occasionally, and as such, lenders use different versions although, with slightly different results. Howbeit, the important thing is that they should all be in the same range, such as “good” or “very good.”

How Does Credit Karma Work

There are different ways credit karma can really work. There we go!

To begin with, in other to become a member, of Credit Karma, you have to give it basic personal information, usually just your name and the last four digits of your Social Security number. With your permission, it then accesses your credit reports, compiles a VantageScore, and makes it available for you.

It also allows consumers have free, continuous access to their credit scores and reports from the two main credit agencies such as the TransUnion and Equifax. You can sign up for Credit Karma on their official website for more details on how it really works.

credit karma
Image Credit: Finovate(Credit Karma)

In addition, its members are free to track their credit scores as frequently as they like without paying for them. It offers many free online services and information that helps people understand their scores. You can as well personalized suggestions to improve your credit scores, like how to reduce your credit use and loan payments. Credit karma also work by using information from two of the three major credit reporting agencies, such as TransUnion and Equifax, to give a VantageScore 3.0 as earlier mentioned above. FICO scoring model is the most widely used credit score among financial institutions and lenders with 90% of lenders using this score to net potential borrowers. Isn’t that great!

How often Does Credit karma Update

You can agree with me that every 7days updates from TransUnion are available through Credit Karma. All you’ve got to do is login to your Credit Karma account once a week to understand where your credit score is. Don’t worry your head If Credit Karma is not updating. It can sometimes take up to 30 days for things to be reported to the large banks. Then it can take another two weeks for the lending institution to make the additional update to your account.

Therefore, with the weekly update, Credit Karma offers you have a great opportunity to spot any potential problems before they arise.

Howbeit, the Credit Karma update keeps you posted as to when things were last reported. They will also show you when they received their recent bit of data and effect changes to your account.

How Does Credit Karma Earn?

However, credit karma is quite transparent about how they earn. Credit Karma does not earn by charging its members, the credit reports, and scores it offers are free. For all the targeted advert they give its members, they have to earn their money through some other means.

The irregular scoring model that Credit Karma uses, with the absence of information from Experian credit reporting agencies, makes their scores differ from scores pulled by other companies and financial institutions. Thus, their credit service and indicators are always within a good range.

Generally, the idea of this is that they make money from financial transactions. Moreover, credit karma makes money by recommending products and services to its members. An example is that it may recommend a specific rewards card that you could have a good chance of qualifying for; and If you decide to apply for a credit card, you will be given permission to share your credit information with the card issuer.

Furthermore, Credit Karma earns revenue through fitting consumers with personalized product advertisements based on their credit profile and probability of approval. These advertisements are placed in front of its users. Hence, they are done with the hope that they will respond by clicking on them or applying through the links.

How to Delete Credit Karma Account

Most times, canceling your account doesn’t really erase every detail of your account. Anyways, even if you deactivate or delete your credit karma account, your information remains with them for the long period. Therefore it’s best if you can ask their support team to help delete your data. Here are simple steps to delete your account.

  • Log in to your account.
  • Select the Help Center option in the bottom left corner on your account homepage. …
  • In the Help Center, type “deactivate account” into the search bar at the top. …
  • On the next page, click Deactivate my Credit Karma account.
  • Swipe again to the next page, scroll down and click the  Cancel account button

Note: When you delete or cancel your credit karma account, you’ll no longer have access to your account history. Therefore, you won’t be able to create a new account for six months.

Conclusion

This company is highly transparent and provides its services through VantageScore. Thus, it offers a reliable snapshot of your current credit status. Their credit scores are updated weekly and this may be particularly valuable to consumers working on repairing their credit rating.

Finally, it can be used to spot inaccuracies in your credit report. It is preferable if you stay proactive and monitor your credit regularly. I Am Sure this will enable you to catch inaccuracies or fraudulent information.

Related Articles:

1.BAD CREDIT: Definitions, Examples & Penalties

2.Personal Finance: Basics, Importance, Types, Management ( + Free Softwares)

Disclaimer!

We do not offer nor solicit any financial institution constituting the provision of investment. If found in this article such content should not be relied upon as they are for informational purposes. We also urge you to obtain appropriate professional advice before making any investment or financial decision.

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