Credit Karma
Encyclopedia
Credit Karma, a San Francisco-based website, is a company that provides free credit scores to consumers. Credit Karma provides the TransRisk credit score generated from national credit bureau TransUnion
, the VantageScore, and the TransUnion Auto Insurance Risk Score.
In addition to providing free credit scores, Credit Karma also offers credit tools like the Credit Report Card, which summarizes a consumer’s credit report into components graded with an A-F letter grade, and the Credit Score Simulator, which simulates the effect of certain financial actions on credit scores.
Using Credit Karma, consumers can update their credit scores daily for free and monitor their credit
over time with additional credit resources.
and Upromise
, launched Credit Karma in March 2008. The start-up was primarily funded by investors Chris Larson, CEO of Prosper, and Mark Lefanowicz, former president of E-Loan
. In 2009, Ron Conway, Dave McClure, and QED investors made additional investments in Credit Karma.
In January 2011, Credit Karma's new Score Center page also began providing the VantageScore
and TransUnion Auto Insurance Risk Score
free to its members. These two new credit scores offer consumers additional insights to get a better idea of their general credit situation.
). Revenue from these advertisements offsets the costs of free credit score tracking for Credit Karma members so the service is free to consumers. Credit Karma keeps users’ personal information private and does not store personal sensitive account information on its site.
Quizzle
provides a similar service, but gives consumers a free Experian credit report rather than a TransUnion credit score. Instead of traditional advertising, however, Quizzle's model is based on selling financial products, like credit monitoring, identity theft protection and a Credit Personal Trainer.
TransUnion
TransUnion is the third largest credit bureau in the United States, which offers credit-related information to potential creditors. Like major competitors Equifax and Experian, TransUnion markets credit reports directly to consumers.- History :...
, the VantageScore, and the TransUnion Auto Insurance Risk Score.
In addition to providing free credit scores, Credit Karma also offers credit tools like the Credit Report Card, which summarizes a consumer’s credit report into components graded with an A-F letter grade, and the Credit Score Simulator, which simulates the effect of certain financial actions on credit scores.
Using Credit Karma, consumers can update their credit scores daily for free and monitor their credit
Credit (finance)
Credit is the trust which allows one party to provide resources to another party where that second party does not reimburse the first party immediately , but instead arranges either to repay or return those resources at a later date. The resources provided may be financial Credit is the trust...
over time with additional credit resources.
Founder and Investors
Kenneth Lin, who previously worked with E-LoanE-Loan
E-Loan, Inc. is a Rosemont, Illinois-based financial services company that offers savings accounts and certificates of deposit and access to partners that may be able to assist customers in obtaining loans....
and Upromise
Upromise
Upromise, Inc. is an American corporation launched in April 2001, that is owned by SLM Corporation, the parent of Sallie Mae. Upromise claims to be the largest private source of college-funding contributions in the United States, with $575 million accrued in members' Upromise "college savings...
, launched Credit Karma in March 2008. The start-up was primarily funded by investors Chris Larson, CEO of Prosper, and Mark Lefanowicz, former president of E-Loan
E-Loan
E-Loan, Inc. is a Rosemont, Illinois-based financial services company that offers savings accounts and certificates of deposit and access to partners that may be able to assist customers in obtaining loans....
. In 2009, Ron Conway, Dave McClure, and QED investors made additional investments in Credit Karma.
Credit Karma’s Credit Scores
Credit Karma provides users with a proprietary credit score generated from TransUnion’s TransRisk score model, which is used by dozens of credit monitoring sites. Credit Karma’s score model ranges from 300 to 850, which is the same scale as the FICO Score, the credit score most often used by lenders. Credit bureau scores, like Credit Karma's, can differ up to 50 points between credit bureaus, but Credit Karma's credit score is typically highly correlated to the FICO score.In January 2011, Credit Karma's new Score Center page also began providing the VantageScore
VantageScore
VantageScore is the name of a credit rating product that is offered by the three major credit bureaus . The product was unveiled by the three bureaus on 14 March 2006...
and TransUnion Auto Insurance Risk Score
Insurance score
An insurance score - also called an insurance credit score - is a numerical point system based on select credit report characteristics. There is no direct relationship to financial credit scores used in lending decisions, as insurance scores are not intended to measure creditworthiness but rather...
free to its members. These two new credit scores offer consumers additional insights to get a better idea of their general credit situation.
Business Model
Credit Karma's business model involves selling targeted advertising (similar to MintMint.com
Mint.com is a free web-based personal financial management service for the US and Canada created by entrepreneur Aaron Patzer. Mint originally provided account aggregation through a deal with Yodlee, but has since moved to using Intuit for connecting to accounts...
). Revenue from these advertisements offsets the costs of free credit score tracking for Credit Karma members so the service is free to consumers. Credit Karma keeps users’ personal information private and does not store personal sensitive account information on its site.
Quizzle
Quizzle
Quizzle.com, a Detroit-based website, is the first company to give consumers free access to their credit score. Quizzle provides consumers with CE credit score based on an Experian credit report. The CE Score was developed by CE Analytics. Using Quizzle, consumers can update their credit scores...
provides a similar service, but gives consumers a free Experian credit report rather than a TransUnion credit score. Instead of traditional advertising, however, Quizzle's model is based on selling financial products, like credit monitoring, identity theft protection and a Credit Personal Trainer.