||A major contributor to this article appears to have a close connection with its subject. (December 2016) (Learn how and when to remove this template message)|
|Industry||Personal finance, Software|
|Headquarters||San Francisco, California|
|Ken Lin (CEO)|
|Products||credit scores, credit reports, credit monitoring|
|Revenue||US$ 200 million (2014)|
Number of employees
Credit Karma is a free credit and financial management platform for US consumers available on the web and major mobile platforms. Founded in 2007, it provides free weekly updated credit scores and credit reports from national credit bureaus TransUnion and Equifax, alongside daily credit monitoring from TransUnion.
Credit Karma also provides credit tools, such as a Credit Score Simulator, which simulates the effect of potential financial actions on a user's credit score; and tailored financial recommendations based on each individual user's credit profile.
In addition to its free credit reports and tools, Credit Karma offers a My Spending Tool through account aggregation service Yodlee, which allows users to track their credit card, loan transactions and balances in Credit Karma’s interface. Credit Karma also hosts user forums for financial product reviews and credit advice, and provides calculator tools for debt repayment, amortization, home affordability and simple loans.
Founder and investors
Kenneth Lin, who previously founded Multilytics Marketing and worked with E-Loan and Upromise, launched Credit Karma in 2007, with the website going live in February 2008. Early investors include Chris Larson, CEO of Prosper, and Mark Lefanowicz, former president of E-Loan.
In November 2009, Credit Karma closed a $2.5 million Series A funding round led by QED Investors with participation from SV Angel, Felicis Ventures and Founders Fund. In 2013, Credit Karma secured $30 million in Series B funding led by Ribbit Capital and Susquehanna Growth Equity. In March 2014, Credit Karma raised $85 million in Series C financing, led by Google Capital with participation from Tiger Global Management and existing investors. The company followed that with $75 million in follow on funding in September 2014 from Google Capital, Tiger Global Management and Susquehanna Growth Equity.
To date, Credit Karma has raised $368.5 million in financing, at a valuation of $3.5 billion.
At the end of December 2014, Credit Karma began offering credit scores provided by Equifax as well as TransUnion, becoming the first reporting tool to offer weekly updated credit scores from two of the three major bureaus for free. Credit Karma features VantageScore 3.0 credit scores, which range from 300 to 850. VantageScore 3.0 is a scoring model developed by the three major credit bureaus (TransUnion, Equifax and Experian) aimed at providing more consistent scores. Consumers can see updates to their credit scores on Credit Karma once a week.
Credit Karma also offers credit monitoring through TransUnion to alert users of changes in their credit report.
In December 2016, the CEO announced Credit Karma Tax, an tax preparation online service that would allow most Americans to file their federal and state taxes at no cost to the filer and that the service will have no hidden fees.
All of Credit Karma’s services are free to consumers. Revenue from targeted advertisements for financial products offsets the costs of free credit reports, credit scores and credit monitoring. Additionally, Credit Karma is paid by lenders for successful recommendations.
In August 2014, the Federal Trade Commission (“FTC”) approved a final order settling an earlier complaint against Credit Karma for allegedly misrepresenting to the public the security of their mobile apps and for failing to protect the transmission of their customers’ sensitive personal information. This issue was limited to mobile applications operating on unsecured networks. There were no known individuals who were affected as a result, and the FTC complaint did not charge any loss of sensitive data. In the settlement, Credit Karma agreed to independent security evaluations of their systems every other year for the next 20 years. The FTC alleged in its complaint that Credit Karma’s mobile apps were launched with code that disabled Secure Sockets Layer (“SSL”) validation. The main allegations from the FTC included: that Credit Karma overrode the default SSL certificate validation settings without adding back in other security measures to compensate for the override, that it failed to appropriately test, audit, and assess its application, and failed to appropriately supervise service providers’ security practices.
- Credit score in the United States
- Credit Sesame
- Comparison of free credit report websites
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- Free score providers | VantageScore Solutions
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- Harris, Meena (21 August 2014). "FTC Settlement Requires Fandango and Credit Karma to Establish Comprehensive Security Programs to Protect Consumers' Sensitive Personal Information". The National Law Review. Covington & Burling LLP. Retrieved 24 August 2014.
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- LaRose, Cynthia J.; Jake Romero (4 March 2014). "Stop Phoning It in on Mobile Security: What Your Business Needs to Know About the Federal Trade Commission's (FTC) Settlements with Fandango and Credit Karma". The National Law Review. ISSN 2161-3362. Retrieved 24 August 2014.