Free Credit Score Monitoring With CreditKarma
Last week, I pointed out how to get a free Experian credit score via Prosper. You can already get free credit reports from AnnualCreditReport.com as well as in other special situations. But what about services like daily credit score monitoring?
Now, a new site called CreditKarma is offering free daily credit scores. For comparison, FICO’s own Score Watch program costs $89.95 per year. So what’s the catch?
- It’s not a real FICO score. This is another FICO-clone, with a score ranging from 300 to 900. (FICO is from 300 to 850.) It also doesn’t say from which bureau this score is based upon, as they say they can pull from any of the big three (Experian, Equifax, Transunion). My guess is that they’ll use whatever is available that is both cheaper than FICO and still reasonably accurate. That’s what I would do…
- You only get the score. The service is pretty barebones. You don’t get information about who’s pulling your credit, how often they are doing it, or information about your existing credit lines. So the “alerts” feature is missing. Instead, the primary attraction is the ability to see trends - is your score increasing or decreasing over time?
- They are advertiser-supported, so I guess they are counting on people to obsessively check their score every day. I’ve always been a bit mystified by such behavior, but I don’t check the stock market ticker all day long either. From their privacy policy it seems that they are using your personal information to target ads to you, but aren’t actually sharing your info with others unless you opt-in. I sure hope not!
Security and Privacy Concerns
Okay, it’s free, so price isn’t a barrier to using this service. But it’s definitely wise to think twice before giving out personal information like my Social Security number to a start-up company. I read through their site, and didn’t see any glaring security holes. They use common third-party systems like ScanAlert Hacker Safe, TRUSTe, and Verisign. If you do notice something fishy, please share in the comments. The CEO will be reading, given that he’s the one that told me about this site.
Invitation Code
It’s currently in Beta now like any good start-up, so you’ll need a special promo code to get in. Use CKFRND.
Find more in Deals & Offers | 1/28/08, 4:39am | Trackback
January 28th, 2008 at 5:56 am
I signed up out of curiosity, and am a bit astonished at the score of 830, which is a good 60 points higher than my most recent FICO score, and 50-80 points higher than all of my FAKO’s. I’d say their scoring algorithm needs some work.
January 28th, 2008 at 6:21 am
They say I am 683 but my Equifax last month was 708 from MYFICO.Com. And that is my lowest.
saladdin
January 28th, 2008 at 6:41 am
I just tried mine and I got score of 857 ?? my Equifax showed score of 790 couple months ago.
January 28th, 2008 at 6:56 am
It should be higher than FICO. The range is larger.
FICO: 300-850
CreditKarma: 300-900
Therefore, a FICO score should not be the same exact score in CreditKarma. FYI, I don’t work with/for CK so my statements are what I think is logical.
January 28th, 2008 at 7:09 am
I tried it out. I thought it was pretty accurate. I don’t know why they wouldn’t make the range the same as FICO though? What’s the point of the extra 50 points?
January 28th, 2008 at 7:27 am
JB,
Who knows. Maybe they want the initial “WOW! My credit is that high??” before people realize the difference in range.
Or they just want to be different.
January 28th, 2008 at 8:31 am
No way guys. You’re saying my fico is really 633?
Sorry. Not even close.
saladdin
January 28th, 2008 at 8:32 am
Is it a hard pull? or soft?
January 28th, 2008 at 9:14 am
If you consider the karma score to be 6/5.5 th of FICO (ie 900-300 divided by 850-300), then a karma point is 0.92 FICO points. Naiserie’s 830 karma score becomes 761, and Kevin’s 857 karma score is 786 in FICO. But of course Saladdin’s score (626) makes no sense whatsoever.
I have no idea what my FICO is, but my karma score is 785 (720 FICO?). I’m curious how this calculation works out for others.
January 28th, 2008 at 10:37 am
It is soft, as you are pulling your own credit score, and it’s not for a lender or credit line.
I would say my my CK score is well over 50 points above my official FICO, but I haven’t checked recently.
January 28th, 2008 at 10:49 am
865!
Since you can get a free report from each of the three majors once a year and you can space them out so that you get an official report every 4 months I’m not sure what good this is other than alerting you to a potential problem if this fake score suddenly dips.
January 28th, 2008 at 11:02 am
Thanks for the all the great feedback. We have every intention of publishing an equivalence table. Part of our beta objective was to observe how this score compares to other scoring methods.
Keep in mind that “scores” are somewhat arbitrary. Its the relative ranking and how your score changes over time that matters most. Also credit scores are non-linear meaning a simple .92 won’t work for everyone. I say this as a former statistician in the credit card industry.
We are working on an article that will address the other questions as well. Keep up the great discussion!
-Ken
January 28th, 2008 at 11:15 am
On 1/28/08, my CK score is 875 and I have $68,000 out on one credit card at 0% (currently residing at FNBO direct). I last checked my True FICO score (via Equifax) on 4/3/07 and hade a score of 759. At that time I had about $57,000 out on a different credit card (at 0% of course). I made my last payment on my student loan 41 days ago - I don’t know if completing payment on that type of loan significantly increases a credit score… Besides the CC debt, I have $75,000 left on my mortgage and $9,000 out on a 0% auto loan. The sum of my credit card limits (I have 8 cards) is currently $182,250.
January 28th, 2008 at 12:10 pm
anyone else having trouble getting the account confirmation code email?
January 28th, 2008 at 2:32 pm
704 for me. This is the same score i got thru experian.
January 28th, 2008 at 2:44 pm
Dear, CK Founder. Have them check the confirmation email sending script. I tried for two members of my household already with different emails and none came. There are no junk filters. Cannot be a coincidence. Thanks
January 28th, 2008 at 3:37 pm
Well, it was fun, but I wish I knew how it relates to an actual score.
Since 894? Not a real score.
But nice for my ego
January 28th, 2008 at 3:39 pm
@ Ken - you can get a free report every year (or every 4 months if you spread them out) but not a free score. Just the report.
Which is why I tried this. Too cheap to pay for my score since I know it is good and have no reason to know it exactly other than curiousity.
But 894 just tells me my score is high, which I already knew. lol
January 28th, 2008 at 4:45 pm
Well it took several hours to receive the comfirmation email.
The score was 694 , last time i check my Equifax score it was 710.
Not bad for a free service.
January 28th, 2008 at 4:57 pm
Here is a little explanation of credit scores and the differences:
http://www.creditkarma.com/article/differentscores
We will try to publish distributions as soon as we get other code finished. Please feel to commit.
January 28th, 2008 at 6:18 pm
i got 666 (lol). do you guys think this is normal for a very young person who only owns one cc? never had any balances and i don’t have debt… i pay everything on time and i hope to build a good score.
January 28th, 2008 at 9:06 pm
CK Founder - It should be a roughly linear conversion, such as 0.92, because you are looking for the conversion factor between two (presumably) similar non-linear relationships. Unless you are using a completely different algorithm to calculate the CK scores than the credit reporting agencies use to report Beacon or FICO scores, a simple conversion factor should suffice for most people.
January 28th, 2008 at 9:07 pm
Also, to get a true reading of how the score would translate to a FICO score, subtract 300 points from your CK score, multiply that number by 0.92, and then add 300 points to the result. This is due to the fact that everybody attains a score of at least 300 in both systems, so the first 300 points are not subject to the conversion factor.
January 29th, 2008 at 1:55 am
I had a problem with the confirmation Email too. I run my own mail server and it filters out Emails coming from an IP address that does not reverse resolve (64.38.7.155)
January 29th, 2008 at 9:23 am
According to WaMu my credit score was 730. Therefore 730/850=85%, and Credit Karma is 807/900=89%. Pretty close.
January 29th, 2008 at 10:20 am
we’ll see. Using Naveen’s conversion mine would be 806 not 850. Normally my Equifax Fico is around 779. 769 average Credco when I purchased my home last September. I’ve never been at 800 much less 850.
January 29th, 2008 at 10:22 am
Also according to Suzy there are 3 FICO’s from each of the 3 bureaus.
Not one
January 29th, 2008 at 11:02 am
Wouldn’t work for me. I think that since i had an ID theft alert put on my accounts with all three credit bureaus they may not be able to pull my info.
January 29th, 2008 at 12:14 pm
CK Founder,
When you said that the .92 conversion won’t work, are you saying this because you use other factors (or the same factors in different percentages) than FICO to achieve the score.
If not, then Naveen’s statistic should give accurate results.
January 29th, 2008 at 12:50 pm
This is just speculation on my part, but I think there will be legal issues if you make direct comparisons to FICO. Each credit score formula is based on tons of different actuarial data about delinquencies and for what scenario (car, credit card, mortgage), so there is no way there will be a 1-to-1 mapping of two different scores. FICO would probably sue if you said “Our 825 is the same as a 745 on FICO”.
January 29th, 2008 at 1:10 pm
“I’ve always been a bit mystified by such behavior”
You say you’re mystified by people checking their faux FICO everyday?
You blog about your finances daily and keep an actual tally for yourself and others! Don’t you think that might be sort of similar?
January 29th, 2008 at 1:26 pm
Sure, but I feel that every day I try to write about something that will either increase my knowledge or directly result in financial gain. Staring at my credit score every day does neither of those things. But I can definitely admit that I’m also abnormal
January 29th, 2008 at 3:05 pm
@ Naveen & Ken,
The reason a direct translation may not work is that the score is a logarithmic function, e.g. a score of 800 is not 33% less risky than a score of 600 (200/600). Also, all scores are proprietary and we cannot assume that each score uses the same (or even a similar) logarithmic scale.
We are trying to address this by reducing all scores to their lowest common denominator, the default risk probability. All scores, no matter the brand or the bureau, have an associated risk probability. In my credit card days we would calculate the risk probability anytime we evaluated a new score.
Right now our biggest hurdle is determining what we can legally publish. Please be patient - we are as eager to provide answers as you are to receive them
January 29th, 2008 at 4:21 pm
Checking your fico every day is sort of redundant and unnecessary dont you thing? Isnt that what credit alerts are for? That way you are not logging in and checking your score for no apparent reason. Credit cards only report once a month, along with most other debts. Monitors should be setup for identity theft reasons but other than that there really isn’t a reason to check your score all the time.
Jonathan - Credit score is an indirect factor of building financial gain. Its also a good indicator of your personal strengths and weaknesses as well. That is unless you have a lot of positive debt, which is a different story.
my 2 cents
January 29th, 2008 at 6:08 pm
My question is how different are the FICO scores usually from the three bureaus? If 15 points is normal, then it seems that Credit Karma seems to be accurate. I haven’t checked my credit report in a while, but they were the same a couple years ago.
WaMu FICO credit score (only TransUnion) as of 01/01/08: 805
CreidtKarma as of 01/29/08: 834
Score math option A:
805/850 = 94.7%
834/900 = 92.7%
Score math option B:
((834-300)*.92)+300 = 791
I do like my TransUnion 805 better than the converted 791. But this could be indicative of the place Credit Karma pulled the data rather than the algorithm. I would like to see where (which bureau) the data is coming from.
Jonathan, thanks for the post. I wonder how many new users they got b/c of you.
January 29th, 2008 at 8:49 pm
[…] more information, check out discussions on My Money Blog and […]
January 30th, 2008 at 12:50 am
CK Founder - I am not arguing that a score of 800 is 33% less risky than a score of 600. I understand that the default risk increases dramatically as scores decline linearly. What I am saying is that given the same actuarial credit data, the scores that your system and FICO report should have a strong correlation. The exact conversion factor between the two systems is 11/12.
That is, for anyone who wants to check what the “FICO Translation” of their CK score would be, you need to:
1. Subtract 300 points from your CK score.
2. Multiply the result by 11/12.
3. Add 300 points to this result.
January 30th, 2008 at 5:39 am
Then why does CK show me at 683 but my real EQ FICO score is 708? And none of my true scores are under 700.
I have 0% utilization on credit cards so my scores rarely jump up/down.
Something still is accounting for the difference.
saladdin
January 30th, 2008 at 2:43 pm
I don’t see the point in giving out my personal info for this service just to monitor a credit score that no one knows for sure how its calculated. Add to the fact that lenders are using this score and I just don’t see the point.
Now, maybe if I was really anal I would do this and watch to see for ups and downs but I think using your free credit reports and monitoring fico scores from time to time will do the trick.
January 30th, 2008 at 3:15 pm
I’ve always made the association of FICO score with applying for a mortgage and that FICO was roughly an average of your credit scores. I used the more general term “credit score” with applying for credit from banks and other private insitutions. I’ve never intertwined the two. A matter of semantics but it didn’t sound right to me the way these posts referred to their credit score as their FICO score. This is what I found on Wiki:
“FICO is a credit score developed by Fair Isaac & Co. It is used by many mortgage lenders that use a risk-based system to determine the possibility that the borrower may default on financial obligations to the mortgage lender. The credit bureaus all have FICO alternatives: Equifax’s ScorePower, Experian’s PLUS score, and TransUnion’s Credit score.”
So you wouldn’t call your Equifax, TransUnion, or Experian scores a FICO score. Like I said, maybe just semantics but thought you should know.
January 30th, 2008 at 4:25 pm
Suresh - You’re absolutely right about that. It’s come to be known as a synonym for a credit score, when it isn’t.
January 30th, 2008 at 5:56 pm
@Suresh - Thanks for your input. However, I am curious why my WaMu account specifically says FICO score, but also says data is only from TransUnion. I wonder if they are misrepresenting the data they are actually displaying.
January 30th, 2008 at 7:06 pm
Michelle - It could be a misrepresentation. “FICO” is becoming part of the everyday lexicon when talking about credit scores, and maybe WaMu recognizes that people right away recognize FICO to be associated with their credit score, albeit incorrectly. The best way to find out is to ask a WaMu representative to explain their use of FICO in your particular situation.
January 30th, 2008 at 7:14 pm
FICO is simply a proprietary formula based on up your credit report data.
Data -> FICO Formula -> FICO Score
We each have 3 reports from different major credit bureaus.
3 different sets of data -> 3 different FICO scores
All the other scores just make their own formulas based on their own info like default rates and payment behavior.
January 30th, 2008 at 7:50 pm
Like Jonathan said, FICO is just a scoring algorithm. The data still must come from one of the three bureaus.
Like Kleenex and Walkman are a brand of tissues and tape players, FICO is a brand of credit scores. There are many alternatives for FICO score that serve the same purpose.
The commonality is that all credit scores must be computed from credit data and therefore derived from one of the three bureaus.
February 1st, 2008 at 6:27 am
[…] [My Money Blog] shares a new service, Free Credit Score Monitoring With CreditKarma. If you’re interested, please read ALL the fine print and use it at your own […]
February 2nd, 2008 at 7:34 am
I tried it. Gave me a score of 908. What the…? I thought max was 900.
I sort of retired 6 years ago and moved overseas, have almost zero income, zero debt, practically no economic activity at all, although I still have a couple of credit cards that I rarely use that have high limits. So I guess I’m a credit superstar!
Hey, can I still rent my credit rating through one of those outfits you talked about a while ago? Or did they shut that down?
February 3rd, 2008 at 4:57 pm
883… it’s no 908 (breaking the rating barrier) but yeah… guess that makes the scores a bit iffy.
When they start adding in more feature such as letting you know where the scores are coming from, when they’re pulling it.. then I guess it’ll be easier to sort of compare and contrast.
One thing I do worry about monitoring services is that if you do check daily (or they automatically pull daily), then you’ll easily clutter up your report with way too many inquiry… pretty messy to sort through.
February 4th, 2008 at 8:18 pm
CK Founder, I have a question. I just pulled my Creditkarma score. It said 852. My WAMU FICO score was 627. How can there possibly be this big of a gap?
February 5th, 2008 at 4:38 pm
@jamaraz.
That large of a gap is probably a discrepancy with the bueaus and not the score. I would suggest you use annualcreditreport to compare the two bureaus reports.
We use TU, you should check what Wamu uses.
February 5th, 2008 at 6:06 pm
CK Founder, WAMU also uses TU. I also had a 3 in 1 pulled in november and my scores were all roughly in the low 600’s.
February 7th, 2008 at 10:04 am
890 (*blush*)
Liked some of the offers at the bottom, might take advantage of them sometime. Glad to know my credit hasn’t suffered due to me neglecting to check it recently.
Thanks for the site.
February 12th, 2008 at 5:25 pm
LOL, you’re funny investing so much thought into this.
My guess is that the real reason the the score range is different is that CK Founder is well aware of the fact that FICO is suing the three CRA’s and VantageScore Solutions and that one of the complaints is that they are trading off their trademarked range of 300-850.
If CK tried using 300-850 they’d get a demand letter from FICO. They may still get a letter given the fact that FICO has certainly seen this tool and the range is still heavily “FICO-ish.”
CK, my guess is that you’ll have to eventually answer the question (possibly under oath at a deposition)… “why did you choose 300-900 since you can scale a credit score to anything you want…A-Z, 1-10, 1-1000, etc.” That question will be hard to answer.
Stop trying to figure what the CK score means in the FICO world. It can’t be done. Two models, two sets of scorecards, different classing, different weights, probably similar characteristics but not exact, and certainly different variables.
I’m intrigued, why free? Free forever or free till we’re hooked?
Take care guys.
February 14th, 2008 at 10:30 pm
To CK Founder:
I too am having problems in receiving the confirmation email. It’s been a few days since I signed up and and tried having it resent to me several times, but still nothing. It’s not in my inbox, junk folder or bulk folder. I just have not gotten the confirmation email so I can’t complete the registration process.
It also doesn’t appear to have any “contact us” area on your website, so if we’re having problems accessing the site, how can anyone help us??
~Victoria
February 17th, 2008 at 6:53 pm
@ everyone
If you want to know the distribution and your ranking please use this link:
https://www.creditkarma.com/compare
It will provide the national distribution, your percentile, and the CK percentile. You will need to log on since the page compares your score against the mean.
@ Victoria, please email help@creditkarma.com for any technical issues.
February 27th, 2008 at 12:07 pm
All what i wanna know is that if it is really free? or would I be charged after kindof free period without being noticed or just with some tiny words put in the terms?
February 27th, 2008 at 2:32 pm
Re: CK Founder, I have a question. I just pulled my Creditkarma score. It said 852. My WAMU FICO score was 627. How can there possibly be this big of a gap?
I have a surprise too: last week I checked Creditkarma my score was 776, today I checked again and it becames 675. During this week, I just paid all my credit card bill. Don’t know what happens.
February 28th, 2008 at 7:14 am
[…] My Money Blog […]
March 3rd, 2008 at 4:26 pm
wow, why was this made so complicated? why didnt you simply emulate fico and use a 300-850 range? why do we have to have a chart explaining to us the difference? why should I sign up for something that only works based on your own numbers (i.e. no one will ever pull my CK score and say, “hmm, he looks good. give him a loan.”)?
sounds like someone didn’t think this one out. I would have signed up and really got into it, but I feel like the score is fake, useless, and just a company trying to “compete” against FICO and make a buck. No Thank You.
March 5th, 2008 at 2:26 pm
[…] Please visit this review at MyMoneyBlog of CreditKarma.com before considering it. […]
March 12th, 2008 at 9:07 am
Dear CK founder,
I would like to unsubscribe from CK as I do not find it useful (it is showing my scores 50 to 60 points higher than the real scores).
I looked up on the website but could not find any way to unsubscribe/cancel my subscription.
The reason I want to cancel is because another credit monitoring service would not let me register with them as long as I am subscribed with your service.
Thanks