Credit Karma believes consumers have a right to know this information with no charge or without the bait and switch of 30 days free followed by enrollment products with confusing opt outs. We subsidize our cost of pulling the credit scores by selling advertising on the site.
Our free credit scores are sponsored by partners who share our vision that consumers should have free and regular access to their score.
The principle of Karma is common to many beliefs. The general idea is that any action a person takes either positive or negative, will have an inevitable equal effect in the future. Your credit score is kind of an expression of this concept; an index of your credit history: your credit karma.
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Privacy and Security
Credit Karma will never share your information without your explicit permission.
In the future, advertisers may give specials discounts to you based on your credit (your karma). However no personally identifiable information will ever be disclosed until you give permission to share the data.
In order to retrieve your first credit score, we must use your social security number. We only use your SSN for this first score retrieval, and we do not store it in our database. After this one-time use, we will not need your SSN again and it will not be stored on any of our systems.
A credit score is a numerical expression derived from a statistical analysis of a person's credit files. A credit score is used to represent the creditworthiness of that person, which is the likelihood that the person will pay his or her debts in a timely manner. A credit score is primarily based on credit report information which is typically sourced from credit bureaus / credit reference agencies. Higher scores are considered better.
This system was developed by lenders, such as banks and credit card companies who use credit scores to evaluate the potential risk posed by lending money to people and to mitigate losses due to bad debt. Lenders use credit scores to determine who qualifies for a loan, at what interest rate, and what credit limits. Other organizations, such as mobile phone companies, insurance companies, employers, and government departments have begun to employ the same techniques.
A credit report contains all of the detailed information in person's credit file maintained by a Credit Bureau. Think of it as an accumulation of information about how you pay your bills and repay loans, how much credit you have available and what your monthly debts are that could be provided by the Credit Bureau in a consumer report to a third party, such as a credit card company or a lender.
The data in a credit report is interpreted through a complex mathematical process to determine a credit score, which is a single number. Credit scores commonly range from 300 to 850.
No, Credit Karma is not a credit bureau or credit reporting agency. We do not maintain or calculate your score. We simply act as your agent in retrieving your score from a Credit Bureau.
No. Credit Karma is making the credit score request on your behalf. Inquires made on your behalf will not be shown to creditors and will not affect your credit score.
There are many, different types of credit scores available from different lenders, credit bureaus, and credit score providers. The three major credit bureaus each offer their own brand of credit score, such as TransUnion's TransRisk score, based on their individual proprietary models for calculating a credit score. Each credit score model derives information from your credit report as provided by that particular bureau, and credit report data can also vary from bureau to bureau. Additionally, independent companies such as Fair, Issac and Company and its FICO score, distribute their own credit score based on their proprietary model that takes into consideration credit reports from all three major credit bureaus. Credit Karma provides the TransRisk New Account Score, VantageScore, and Auto Insurance Risk Score from TransUnion.
The common thread among all credit score models is that they are a measurement of your creditworthiness, each with their own scale, factors, and credit report data taken into consideration. It is hard to say which model is superior, but picking a single credit score model and tracking it over time will help you understand and manage your credit health. This is a significant reason why we encourage you to come back and check your score often at Credit Karma.
Credit Karma provides users with their TransRisk New Account Score, VantageScore, and Auto Insurance Score as supplied by TransUnion.
The TransRisk score is calculated by TransUnion using their proprietary scoring model and is the original credit score provided on Credit Karma.
The VantageScore is calculated by TransUnion using the VantageScore model, developed jointly by all three major credit bureaus. This model introduces the first, consistent scoring methodology shared by all three bureaus.
The Auto Insurance Score is a numerical measurement of the risk a consumer may pose to an insurance company. This score is calculated from data derived from a consumer's credit report.
Please see our News section to read more about the VantageScore and Auto Insurance Score.
Credit Karma respects your privacy and your request for additional protection of your credit information. If there is a fraud alert on your file with a credit bureau, you will be required to answer additional security questions to access your credit score. At this point, users who fail this additional security measure will not be able to access their credit score or the Credit Report Card due to our commitment to security.
The three nationwide Credit Reporting Agencies have created a centralized service as a resource for consumers. For more information about this, please visit www.annualcreditreport.com
Auto Insurance Score
Your Auto Insurance Score represents the risk you pose to an insurance company, more specifically your likelihood of filing a claim that will result in losses for the insurer. Certain correlations have been shown to exist between patterns in credit data and patterns in driving habits and behavior. This correlation is the foundation for basing an Auto Insurance Score on credit information. For more detailed information on the use of credit data for calculating this score and how it is calculated, please see the Federal Trade Commission's Report on Credit-Based Insurance Scores
The Auto Insurance Score provided by TransUnion does not take into account your driving record or any other information outside your credit report.
The Auto Insurance Score is based on an entirely different scale and scoring model than the TrasnRisk Score and the Vantage Score, so it is unlikely to be numerically equivalent to those scores. Additionally, the credit factors that are considered when calculating your Auto Insurance Score are differently weighted than when used to calculate the TransRisk Score and Vantage Score. The VantageScore and TransRisk are both used to assess creditworthiness, while the Auto Insurance Score measures your insurability.
Your Auto Insurance Score represents the likelihood you will file a claim that will result in losses for an insurance company. As such, auto insurance companies in most states use this score to help price premiums and determine rates for their customers. Today, the fifteen largest auto insurers (with a combined market share of 72% in 2005) all utilize these scores. Many smaller automobile insurers also use credit-based insurance scores.
Credit Karma does not calculate your Auto Insurance Score or any of the scores we provide. All of the scores featured on our site are calculated and provided by TransUnion.
The TransRisk score is based on a more classic credit scoring model that primarily weighs payment history, debts, length of credit history, number of recent credit inquiries, and mix of credit usage to calculate your credit score.
The VantageScore is based on the next-generation scoring model developed to help better assess consumers' creditworthiness. The VantageScore model primarily weighs your payment history, credit utilization, outstanding balances, length of credit history, recent credit, and available credit to calculate your credit score.
The difference in these different factors being weighed can lead to large differences in the two credit scores. Additionally, the VantageScore can score a wider range of consumers than TransRisk because it puts more weight on recent credit history rather than age of credit, which will have an impact on the number of scores feeding into the national averages calculation.
The VantageScore was created in collaboration by the three major credit bureaus: Equifax, Experian, and TransUnion. The VantageScore model was created to address three primary issues:
- FICO score models tend to be different between each bureau, resulting in slightly different FICO scores from each bureau. There is no consistent scoring methodology.
- Older, traditional scoring models tend to weigh credit history heavily, which leaves many consumers unable to receive a credit score because of their lack of credit history, also known as "thin file" status. The VantageScore provides more weight to recent credit history versus length of credit, which allows for consumers with "thin files" to generate a credit score.
- Getting a FICO score tends to be expensive, leading to higher costs for banks and consumers to monitor their credit health. The VantageScore, more affordable than FICO, challenges FICO's dominance in the lending industry.
The creators of the score, VantageScore, LLC, provided the following statistics on which institutions are using this new score:
- 4 of the top 5 financial institutions
- 5 of the top 5 credit card issuers
- 2 of the top 5 auto lenders