If you’re a Canadian who has heard about Credit Karma and its promise to bring you consistent updates to your credit score free of charge, you might be wondering: is Credit Karma safe? It’s only natural to be skeptical when something seems like it might be too good to be true, but just because it is a free service doesn’t necessarily mean you’re taking a risk by using it. In this case, you’ll be happy to hear that Credit Karma is completely safe, as we’ll get into in more detail below.
About Credit Karma
Your credit score is one of the most important parts of your financial life, but it can be surprisingly hard to know what yours is. Canadian consumers are entitled to at least one free credit report each year to gauge where they stand on the credit market, but although this is helpful, one single report won’t get you very far unless your credit is already good. You have always had the option of buying more over the year, but they don’t come cheap, especially when many are needed to actually track your improvement progress in any reasonable amount of time. This effectively creates a major roadblock for people who are trying to recover from poor credit.
Credit Karma wants to change that. Instead of continuing to restrict people to that single annual score report, they aim to allow a person to check their credit as often as they feel the need to. They are much more established as an American company, where they offer extra services such as a free tax preparation portal; they are just getting started in Canada and are not yet available for users in many northern provinces, but they plan to expand enough to cover the entire country in the near future.
Credit Karma’s sole Canadian product at the moment is their credit score checker. This website asks users to input some personal data (name, birthday, etc.) to confirm your identity and set up an account, but it does not require any credit card information whatsoever. Credit Karma then uses the data on your new account to pull your credit score and activity information from TransUnion, one of Canada’s largest credit bureaus. You’ll not only see your score itself, but also what was reported to the bureau and which credit companies you may have recently applied to pulled your score from this source. Alongside this, they also explain why your report looks this way and what you can do to help it improve in the future. You can then refresh your score every week to see if the things you did made any difference. These extra inclusions are particularly helpful because they give users a concrete path to improvement – from there, it’s all up to each individual person.
Credit Karma is a free service, but like any company providing a product or service, they have to make money somehow – that’s one of the main reasons why people find themselves asking ‘is Credit Karma safe?’ Since there is a lot of media coverage right now about the possibility that companies are selling your data to advertisers, you might expect to find that that practice is the source of their revenue. Fortunately, this is not the case. Credit Karma is funded entirely by targeted ads for various financial products that your data suggests you might find useful and are highly likely to qualify for; these are the products displayed with your credit report when receive it.
This targeting happens internally thanks to machine learning algorithms, and because of this, your data never comes into contact with any person affiliated with either Credit Karma or any third-party advertising partner. Not only does this practice allow Credit Karma to monetize their business while still handling your data responsibly, but it actually also benefits you as well – you don’t need to hunt down viable options when there are some right there in front of you. You are in no way forced to actually apply for the products listed or even click on the ads themselves, but the option is there for you if you choose. All this business model does is present you with options you might like to try out if you happen to be in the market for a financial solution. The result of this is that everyone ends up better off.
What Customers Think
The reviews for this company aren’t uniformly positive on the consumer end, but they are generally quite good, especially on Trustpilot. Poor reviews usually stem from either credit results that the reviewer did not like (but which were not Credit Karma’s fault) or issues the person had with their tax preparation service, which is not available in Canada. Very few people claim to have been ripped off, and those that do level that accusation only do so in a very vague way with little evidence to back up their claims.
Professional reviewers, on the other hand, seem to love the site, indicating that the company can be probably be trusted to handle your information appropriately and offer you something of value in return. After all, these people have no personal stake in the matter, unlike certain lone individuals who may be more upset about their own financial situation than anything that Credit Karma actually did. Their reviews are a good indicator that the answer to the question ‘is Credit Karma safe’ is ‘yes.’
What We Think
Our thoughts on Credit Karma here at Bonsai Finance generally align with what other professional organizations think of them. While we naturally feel we do a better job in terms of recommending products (remember, your credit score usually isn’t the only variable that institutions consider when making approval decisions, and Credit Karma has none of your other relevant information), this company provides an excellent complementary tool to our services, and we see no reason to be apprehensive about using them. So, is Credit Karma safe? Yes, and don’t be afraid to give them a try!