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,^[1] the VantageScore, and the TransUnion Auto Insurance Risk Score.^[2]

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.

Founder and investors[link]

Kenneth Lin, who previously worked with E-Loan and Upromise, launched Credit Karma in March 2008.^[3] The start-up was primarily funded by investors Chris Larson, CEO of Prosper, and Mark Lefanowicz, former president of E-Loan.^[4] In 2009, Ron Conway, Dave McClure, and QED Investors made additional investments in Credit Karma.^[5]

Credit Karma’s credit scores[link]

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,^[6] but Credit Karma's credit score is typically highly correlated to the FICO score.^[7]

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.^[2] These two new credit scores offer consumers additional insights to get a better idea of their general credit situation.^[8]

Business Model[link]

Credit Karma's business model involves selling targeted advertising (similar to Mint). Revenue from these advertisements offsets the costs of free credit score tracking for Credit Karma members so the service is free to consumers.^[9] Credit Karma keeps users’ personal information private and does not store personal sensitive account information on its site.^[10]

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.^[11]

References[link]

External links[link]

• Official Site