- Who owns Credit Karma and how long it's been around
- How Credit Karma makes money if scores are free
- Where Credit Karma gets your credit scores from
- What the FTC said about Credit Karma
- Is Credit Karma safe with your personal details?
- Credit Karma Savings and the bank behind it
- Credit Karma facts at a glance
- Who benefits from using Credit Karma
- So, is Credit Karma legit?
- Frequently asked questions
Credit Karma is a real, long-running US credit service that's part of Intuit, and it says it will never ask you to pay to see your scores. It earns commission when banks and lenders pay for approved applicants, which is the catch to keep in mind. In 2022 the FTC also settled a case over its pre-approved credit card claims.
If you've ever wondered how a site can hand out credit scores for nothing and still be a business, you're asking the right question about Credit Karma. I'm not a financial adviser, so I'm not going to tell you whether to apply for anything. I've gone through Credit Karma's own pages and the FTC's announcement, so you can see how the model works and where to be careful.
Who owns Credit Karma and how long it's been around
Credit Karma's own How it works page says it's part of the Intuit family of companies, alongside TurboTax, QuickBooks and Mailchimp. Wikipedia says Credit Karma was founded in 2007, and that Intuit acquired it for about 7.1 billion US dollars in 2020. So this isn't a new app that might vanish, it's an established brand with a big parent company.
How Credit Karma makes money if scores are free
Credit Karma says it gets paid by the banks and lenders it works with. If you apply for a product it recommends and you're approved, its page says the bank or lender typically pays a small commission for making the connection. That's the whole trade. You see the scores without paying, and the company is rewarded when you take up an offer.
Credit Karma's own page also says it will never ask you to pay to see your credit scores and reports. If anyone using its name asks for a fee to see your score, that's not how the company describes itself.
- Offers are adverts from partners, so treat them as options, not advice.
- Read the lender's own terms before you apply, not just the summary.
- Remember the company benefits when you're approved, so take your time.
Where Credit Karma gets your credit scores from
Credit Karma says it uses two of the three major credit bureaus, Equifax and TransUnion. It also says it provides your VantageScore 3.0, which it describes as one of many scoring models. That matters because the score a lender looks at may use a different model, so the number you see on the app can differ from the one in a loan decision.
What the FTC said about Credit Karma
In 2022 the FTC announced action over Credit Karma's marketing. It alleged that, from 2018 to 2021, Credit Karma told many consumers they were pre-approved for credit card offers, and that for many offers almost one third of applicants were denied. The FTC said applicants could also face a hard inquiry on their credit report.
The settlement required Credit Karma to pay 3 million US dollars to be distributed to harmed consumers, and to stop misrepresenting whether people are approved or pre-approved. As the FTC notes, a complaint states allegations that haven't been decided in court, so I'm quoting the regulator and not adding a verdict of my own.
Is Credit Karma safe with your personal details?
To pull your reports, Credit Karma asks for personal details such as your name, address and date of birth. Its own page says it takes security seriously and doesn't sell your information to unaffiliated third parties for their advertising or marketing lists. That's a statement from the company, not an audit, so use a strong unique password and switch on the extra security options in your account.
Because it holds sensitive data, it's also a favourite name for imitators. A real service won't ask you to pay to see your score, and you should never share a one-time code with someone who contacts you out of the blue.
Credit Karma Savings and the bank behind it
Credit Karma also offers a savings account, and the company says plainly that it isn't a bank. It says it partners with MVB Bank, Inc., Member FDIC, to provide banking services supporting Credit Karma Savings. If you use it, read the disclosures to see exactly what that FDIC wording covers, and check the terms for your own situation.
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Credit Karma facts at a glance
| What I checked | What Credit Karma and the FTC say |
|---|---|
| Owner | Part of the Intuit family of companies |
| Founded | 2007, according to Wikipedia |
| Score model | VantageScore 3.0 |
| Credit bureaus | Equifax and TransUnion |
| How it gets paid | Commission from banks and lenders when you apply and are approved |
| Charge for scores | It says it will never ask you to pay to see them |
| Regulator action | FTC settlement over pre-approved claims, 3 million US dollars |
Who benefits from using Credit Karma
People who just want to keep an eye on their credit tend to get the most from it, because the useful part, seeing your reports and spotting changes, doesn't depend on buying anything. If you run a small business or freelance, it's one way to keep tabs on your own credit alongside things like freelance writing opportunities that bring in irregular income. For card ideas, my piece on credit card rewards programs for low credit scores explains how the options differ.
So, is Credit Karma legit?
From its own pages and the FTC record, Credit Karma is a real company that provides what it says it does. The honest caution is the business model. It's paid when you're approved, so the word pre-approved should send you to read the lender's terms, and a hard inquiry can follow a real application. Use it as a free window onto your credit, and take your time over any offer.
Frequently asked questions
Is Credit Karma legit?
Credit Karma is a real service that's part of Intuit, and it says it will never ask you to pay to see your scores. It earns commission from partner lenders, and the FTC settled a case over its pre-approved claims in 2022.
How does Credit Karma make money?
It says it gets paid by the banks and lenders it works with, and that the bank or lender typically pays a small commission if you apply for a product and are approved.
Which credit bureaus does Credit Karma use?
Credit Karma says it uses two of the three major bureaus, Equifax and TransUnion, and provides your VantageScore 3.0.
Is Credit Karma a bank?
No. The company says it isn't a bank and partners with MVB Bank, Inc., Member FDIC, to provide banking services supporting Credit Karma Savings.
What did the FTC say about Credit Karma?
The FTC alleged Credit Karma told many consumers they were pre-approved when almost one third of applicants for many offers were denied. The settlement required a payment of 3 million US dollars for harmed consumers.
Does Credit Karma sell your data?
Its own page says it doesn't sell your information to unaffiliated third parties for their advertising or marketing lists. That's the company's statement, so read the privacy policy for the detail.
