Credit Karma offers consumers access to credit scores and other credit information from TransUnion and Equifax, as well as tools for consumers to improve their rating. Users can access Credit Karma's information for free and as frequently as they desire, without registering with a credit card. By contrast, the three major credit bureaus provide complete credit score information for free to consumers only once a year, charging a fee for added requests. Credit Karma makes money by recommending financial products such as credit cards based on your credit information, and gets a commission if you buy a recommended product. Credit Karma recently has expanded by offering free tax preparation assistance as well as a high-yield savings account through a partnership with MVB Bank.
- Credit Karma offers free access to TransUnion and Equifax credit data, as well as offering tax preparation assistance, and other services.
- It makes money by receiving a fee every time a user purchases a product or service it recommends.
- Credit Karma is a fintech startup focusing on providing credit information.
- On February 24, 2020, Intuit announced it was purchasing Credit Karma for $7.1 billion.
Credit Karma's Industry
Credit Karma is a fintech services company. Unlike some companies in the industry, Credit Karma and its immediate competitors do not sell your data to third parties. In addition to providing credit scores, Credit Karma also guides consumers regarding what next steps to take after they have accessed their initial credit information. For example, the company recommends credit cards that are tailored to each consumer based on the odds of approval. It also provides users with guidance about tailored personal, home, and auto loans based on income and credit scores.
Credit Karma's competitors include NerdWallet, Credit Sesame, and Mint, which also offer free credit score information and financial tools.
Fundraising and Financials
Credit Karma includes more than 100 million members in the U.S., Canada, and the U.K. as of February 2020. According to Crunchbase, Credit Karma has raised $868 million over 8 funding rounds, the most recent of which was in March of 2018. The company at that time was valued at $4 billion. Its lead investors include Silver Lake Partners and SV Angel.
History and Leadership
San Francisco-based Credit Karma was founded in 2007, offering its first free credit scores in 2008. The company was founded by Ken Lin, current CEO, who spent the early part of his career at E-Loan, an online lender specializing in debt consolidation, and UPromise, a subsidiary of student loan service Sallie Mae which runs a customer loyalty program focused on saving for college and paying down student loans.
On February 24, 2020 Intuit Inc. (INTU), maker of Turbotax and QuickBooks, announced that it was purchasing Credit Karma for $7.1 billion in cash and stock.
On November 25, 2020, Intuit and Credit Karma announced that they had received clearance from the U.S. Department of Justice (DOJ) to go ahead with the previously announced merger. The DOJ stipulated that one of the conditions that must be met in order for the acquisition to take place is that Credit Karma must divest its Credit Karma Tax business to Square Inc. (SQ).
In October 2020, Credit Karma announced that it would begin offering checking accounts to members that already hold a savings account with the company.
How Credit Karma Reports Diversity & Inclusiveness
As part of our effort to improve the awareness of the importance of diversity in companies, we offer investors a glimpse into the transparency of Credit Karma and its commitment to diversity, inclusiveness, and social responsibility. We examined the data Credit Karma releases. It shows Credit Karma does not disclose any data about the diversity of its board of directors, C-Suite, general management, and employees overall. It also shows Credit Karma does not reveal the diversity of itself by race, gender, ability, veteran status, or LGBTQ+ identity.