Credit Karma

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Credit Karma, Inc.
Industry Personal finance, Software
Founded 2007[1]
Headquarters San Francisco, California
Key people
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.[2]

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.

As of April 2015 Credit Karma had over 35 million members[3] and 250 employees.[4] It has 50 million members in 2016.

Founder and investors[edit]

Kenneth Lin, who previously founded Multilytics Marketing and worked with E-Loan and Upromise,[5] launched Credit Karma in 2007, with the website going live in February 2008.[6] Early investors include Chris Larson, CEO of Prosper, and Mark Lefanowicz, former president of E-Loan.[7]

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.[8] In 2013, Credit Karma secured $30 million in Series B funding led by Ribbit Capital and Susquehanna Growth Equity.[9] 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.[10] 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.[11]

Credit scores[edit]

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.[12] 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.[13]

Credit Karma also offers credit monitoring through TransUnion to alert users of changes in their credit report.

Tax preparation[edit]

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.[14]

Business model[edit]

All of Credit Karma’s services are free to consumers.[15] 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.[16]


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.[17] The FTC alleged in its complaint that Credit Karma’s mobile apps were launched with code that disabled Secure Sockets Layer (“SSL”) validation.[18] 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.[19]

See also[edit]


  1. ^ "Credit Karma". CrunchBase. Retrieved 3 April 2015. 
  2. ^ Basia, Hellwig (2015-02-02). "Why Credit Karma Is Free & How It Makes Money". Investopedia. Retrieved 2015-04-03. 
  3. ^ Lin, Ken (2015-01-20). "New Year, New Milestone: Credit Karma Membership Hits 35 Million". Credit Karma Blog. Retrieved 3 April 2015. 
  4. ^ Cooper, Julia (2015-03-13). "Who's hiring? These fast-growing S.F. tech employers have big plans". San Francisco Business Times. Retrieved 3 April 2015. 
  5. ^ ""Kenneth Lin", LinkedIn". 
  6. ^ Kincaid, Jason (2009-11-04). "Credit Karma Raises $2.5 Million To Take The Mystery Out Of Credit Scores". TechCrunch. Retrieved 4 April 2015. 
  7. ^ Levinson, Rick (2009-06-09). "Credit Karma Introduces Free Credit-Card, Debt-Tracking Tool". Bloomberg L.P. Archived from the original on 2012-01-12. Retrieved 2009-07-27. 
  8. ^ Kincaid, Jason (2009-11-04). "Credit Karma Raises $2.5 Million To Take The Mystery Out Of Credit Scores". TechCrunch. Archived from the original on 2012-01-12. Retrieved 2010-09-02. 
  9. ^ . Credit Karma. 2013-04-02 Retrieved 2014-11-04.  Missing or empty |title= (help)
  10. ^ Shieber, Jonathan (2014-03-12). "Credit Karma Confirms New $85M Financing Round Led By Google Capital". TechCrunch. Retrieved 2014-05-21. 
  11. ^ Sharf, Samantha. "Credit Karma Raises $175 Million At $3.5 Billion Valuation". Forbes. Retrieved June 2015.  Check date values in: |access-date= (help)
  12. ^ Shin, Laura (2015-04-06). "Credit Karma Adds A Second Free Credit Score". Forbes. Retrieved 6 April 2015. 
  13. ^ Free score providers | VantageScore Solutions
  14. ^ Lin, Kenneth. "A Holiday Gift from Credit Karma: Don't Pay for Filing Your Taxes Ever Again". Credit Karma. Retrieved 22 December 2016. 
  15. ^ Vance, Ashlee (2014-07-30). "A Free Credit Report With No Strings Attached. Honest". Bloomberg Businessweek. Retrieved 2014-11-04. 
  16. ^ "How it Works". Credit Karma. Archived from the original on 2016-09-16. Retrieved 2016-09-21. If you get a product through one of our recommendations, the bank or lender pays us. 
  17. ^ 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. 
  18. ^ "Fandango, Credit Karma Settle FTC Charges that They Deceived Consumers By Failing to Securely Transmit Sensitive Personal Information". Federal Trade Commission. Retrieved 24 August 2014. 
  19. ^ 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. 

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