Our Credit Karma review highlights a financial management app rather than a true budgeting product. The company started in 2007 and now has roughly 130 million users and is the new home of the Mint mobile app. Credit Karma was initially a convenient way to track your credit score, but it has become much more.
Pros
Free
Tracks your credit score
Provides credit score insights and education
Mini reports, snapshots, and bill tracking available
Provides credit score change alerts
Cons
Many targeted advertisements
Reports of inaccurate financial product approval odds
Doesn’t provide budgeting tools
Credit Karma Overview
Today, the app not only provides your ongoing credit score using the VantageScore 3.0 model, which uses data from Experian, Equifax, and Transunion, but it offers a whole range of financial services and tools. However, the app was never designed as a day-to-day budgeting app. Instead, it focuses on tracking your financial picture as a whole while not meddling with your daily spending.
If you’re looking for a budgeting app that offers daily spending tracking, Rocket Money has a free version that also provides credit score tracking. Quicken Simplifi offers budgeting and credit score tracking, too. However, it doesn’t offer a free version of its app.
Credit Karma is an excellent tool for what it does. Despite some consumer complaints, the platform and its objectives are solid, which is to provide credit report information, education, and management tools. I’ve used Credit Karma almost since its inception to keep an eye on my credit score and financial health. I also rely on it to notify me when my credit score changes. Here’s what you need to know when deciding if Credit Karma is worth downloading
Credit Karma Review: Features and Benefits
While Credit Karma doesn’t provide daily budgeting features, the app has numerous other tools and benefits that make it worthwhile. Plus, you’ll never have to provide a credit card number to the app, as the service is free. Although, you’ll have to put up with plenty of advertisements. More about that later.
In addition to its more well-known features, starting in late 2023, Credit Karma began offering its early direct deposit program, in which users can access government funds, such as Social Security, SSI, and VA benefits, up to five days early.
- Features your credit score
- Uses VantageScore 3.0
- Offers helpful credit-building tips
- Links to and pairs well with TurboTax
- Credit score change alert notifications
- Credit Karma Money accounts available
- Bill pay available through Money accounts
- Savings account can earn interest
- Credit fraud and identity theft alerts
- Numerous ads to contend with
- Good source for finding loans and other financial products
- Insurance-related products available
- Credit Builder Plan is available
- Educational tools and a credit score simulator available
About Credit Karma
Credit Karma’s long list of available services includes providing your credit score and credit report along with education tools and alerts to help you monitor your financial life. While the company states that it updates your credit score daily, my experience tells me that the app may check it daily but only provides updates once a week or so.
Additionally, the company watches for identity theft and fraud, alerting you when it sees anything suspicious or when your credit score changes.
If you wish to take advantage of Credit Karma’s more in-depth tools and use it as a financial service, you’ll have to provide account and asset information. The transactions and data sharing are as safe as possible, as the app uses 256-bit encryption for all sensitive transactions. I only recently started to use this feature to monitor my net worth. I was pleasantly surprised with the app’s accuracy when it correctly estimated my car and home values.
Though I haven’t tried them, Credit Karma now also offers its Money Save and Money Spend bank accounts. The Credit Karma Money Save account even earns interest, and both versions are insured by FDIC. Through the Credit Karma Money Spend account, users can set up bill pay services, which are rare among budgeting apps in general. Insurance-related services are also available in the app.
So, how is all of this available for free? Credit Karma gets paid commissions from its partner companies, of which there are many. The companies include credit card, loan, insurance, and other financial service providers. And they do a lot of advertising on the app. While you’re not obligated to respond to the ads or ever use the companies involved, the ads can be quite intrusive.
The Credit Karma App Ratings
While Credit Karma as a company has earned itself mixed reviews, the ratings for the actual app on the App Store and the Play Store are excellent at 4.8 and 4.7, respectively. Positive reviews often cite convenience and ease of use.
How Much Does Credit Karma Cost?
While Credit Karma is free to use, the company allows tons of credit-related advertising on its app, which can be annoying, to say the least. However, this is how Credit Karma makes a living, and the company is transparent about the issue. It’s also transparent about the fact that it shares your personal information with these advertisers in order to target their ads to things that will likely interest you.
You’re under no obligation to use any of the advertisers or reply to any ads. Credit Karma’s functionality won’t change for you. However, some consumers report not being okay with that level of intrusiveness.
So, how much does Credit Karma cost? Nothing except your patience and tolerance.
Credit Karma Review: Editorial Rating
Trusted Company Reviews Rating Score for Credit Karma: 9.1
While our Credit Karma review rates the app highly at 9.1 out of 10 points, we didn’t include it in our best budgeting apps overview because it simply doesn’t belong there. It’s an entirely different type of product than one that tracks your daily spending and helps create a detailed budget. Credit Karma has a different job, which is to provide an overview of your finances. I use it to supplement my new budgeting app, Copilot.
| Cost | $0 |
| Monthly pay available | NA |
| Free Trial period | NA |
| Credit score tracking | Yes |
| App Rating (App Store/Play Store) | 4.8 / 4.7 |
What We Like
We like Credit Karma for many reasons. As a supplement to a more purpose-related budgeting app, Credit Karma works well for monitoring your bigger financial picture. That said, we also like the extra perks, which include the app’s ability to monitor your credit card and banking accounts for fraud and provide any potential threat information through identity theft alerts. Most budgeting-type apps don’t concern themselves with that level of identity theft protection.
We also like that Credit Karma links to and pairs well with TurboTax, as they’re both owned by Intuit. The pairing works well for estimating your ongoing potential tax return, provided you’ve added your information to the app. Intuit Assist is also available to answer any of your questions as you go.
What We Don’t Like
While many users have complained that Credit Karma’s advertising is too much to handle, we can let that slide a bit. After all, the company does need to make a profit. Our primary concern is that the Better Business Bureau lists a 2022 settlement involving Credit Karma for knowingly recommending products that some users didn’t qualify for. This resulted in hard inquiries on users’ credit reports after credit denials.
While we hope that the issue is a thing of the past, using the same caution you would normally use when applying for credit is essential when doing the same when applying to one of Credit Karma’s advertisers.
A more minor dislike of ours is Credit Karma’s insistence on using the VantageScore 3.0 model for credit scores. While it’s a valid credit score, it’s not a FICO score, which is more often used by lenders.
Credit Karma Reviews
Credit Karma Reviews are mixed. At an average of 3.0 stars, many reviewers love the app and the company, while others offer, let’s call them, less rosy reports. The 2022 incident and Credit Karma’s actions leading up to the lawsuit didn’t do its review scores any favors.
However, there are plenty of recent single-star reviews that often cite the company’s marketing tactics as being aggressive, and a few list technical issues as the reason for the poor rating.
On the other hand, positive reviews cite excellent customer service and a helpful platform in general.
Who Credit Karma is Best For?
If you’re looking for a budgeting app, you won’t find what you need with Credit Karma. However, the app works great as a supplement to a more well-defined budget app. On its own, Credit Karma, as a credit score and financial picture monitoring tool, is highly effective and will work well for anyone who needs the service.
Of particular interest to some is the company’s Credit Builder tool and service. Credit Builder is available if you have a credit score below 620. It exists to help you raise your score using a savings plan and the Credit Karma Money Save account.
Essentially, the plan involves depositing money into the account, which appears as a line of credit. Your deposits are reported to the credit bureaus as you make payments, and after reaching $500 with successful, on-time payments, you can access the money again through your Credit Karma Spend account. The reported on-time payments can boost your credit score.
If you’re wondering how much of a boost your score could get, the app provides a credit score simulator to help you estimate the benefit.
Is Credit Karma Worth It?
The fact that Credit Karma is free should make it worth downloading without question. However, many users complain about the constant barrage of advertisements and offers. Truth be told, they are often appealing and can be hard to turn down. But, if you can put up with, and even ignore, the onslaught, the app is well worth having, even if you just use it to check your credit score occasionally.
Credit Karma Alternatives
Credit Karma has several credit monitoring competitors, most of which have a monthly or annual cost associated with them, including TransUnion, myFICO, Experian, Aura, and Credit Sesame offers a free version, though it only monitors a single credit bureau. However, Credit Karma was never designed to be a paid-for app, so it really doesn’t belong in this group either.
As far as competing against actual budgeting apps, Credit Karma offers a different set of financial tools than any that can rival those of the major players. For a budgeting app, see the following listings.
- Copilot review
- YNAB review – Excellent for budgeting beginners
- Rocket Money review – Also has a free version available
- Monarch review – Great for couples
- Quicken Simplifi review – Also offers credit score tracking
Rating Breakdown
| Attribute | Rating Score 1-10 |
| Cost | 8 |
| Cost variables | 8 |
| Trial period | 9 |
| Features | 8 |
| Setup ease | 8 |
| Ease of use | 6 |
| Average time to effectiveness | 8 |
| Trustpilot review score | 1.4 |
| Other reviews score average | 3 |
| Average app rating | 4.8 |
| Editorial opinion score | 7 |
| Total Raw Score | 71.2 |
| Raw score averaged = TCR Rating Score | 9.1 |
Frequently Asked Questions
Is Credit Karma legitimate and safe?
Is Credit Karma actually free?
Source
Logo image source: creditkarma.com
Deane Biermeier
