There is no shortage of invitations to see your “free” credit score. However, you may have by now realized that there comes a catch in the form of an expensive credit monitoring service that you are automatically enrolled in as a condition of seeing your free score.
CreditKarma.com is a service that provides a similar credit score at no charge. The catch with this service is that you are presented with numerous advertising options but not enrolled into anything. In other words, it is just like any other website where you may simply ignore the advertisements.
The score is based on TransUnion’s TransRisk score, which is similar to what a lender would see if they requested your FICO score from TransUnion. You can generally expect your actual credit score to be within 20 points or so of this consumer product, making it a good indicator of your actual credit score with TransUnion.
In addition to the credit score, CreditKarma provides a simulation tool that predicts the impact on your credit score if you should take one of several actions. This can be a useful educational tool if you are considering a couple of different actions and want to see how your scores might be impacted by your actions.
Part of the advertisements are based on credit monitoring services. Others are credit card products that you could select from if you wanted to obtain new plastic.
We generally advise against responding to advertisements in order to open new credit products. Instead, you should compare different options to determine which products are the best deal. For this comparison, bankrate.com might be a better resource to use as a comparison tool between competing products. Still, both resources are compensated by the financial institutions that you patronize, so understand that there may be many other products that are not represented by either website that could actually be the best fit for your needs.
CreditKarma’s free credit score is a useful tool, but it is not the absolute last word on credit scoring. Like most consumer products including those marketed directly by the three main credit bureaus, it does not provide your actual score. It is simply a representative number that should be a good predictor of your actual score. Therefore, it should be used as a general guide for credit improvement rather than as a concrete decision-making tool.
It is worth trying out, and you have nothing to lose so long as you avoid signing up for any third-party advertised products. If you still need additional help in understanding your credit, then consider paying a few bucks to complete a credit report review through your local consumer credit counseling service.
