After seeing the bombardment of commercials on TV, I decided to try Credit Karma as a potential way to keep track of my credit score without paying the outrageous fees charged by credit reporting agencies.
Credit Karma works by tying in with credit reports generated by Trans Union. Trouble is, Trans Union credit reports are notoriously inaccurate because they don't perform due diligence (obligatory under Canadian law) to ensure that their information is complete and up to date. Also, Trans Union uses several different algorithms to generate reports, and Credit Karma is only tied to one of those algorithms - the least accurate one.
As a result, my Credit Karma report was full of inaccuracies. The score was too low. There were a number of closed, 10+ year old credit card and loan accounts that were listed as still open. The one credit card that I use today was listed as delinquent and closed, despite the fact that their own payment history chart showed that I had never missed or been late on a payment. Finally, I took out a consumer proposal 2 years ago, that was listed as a full bankruptcy, which means a huge hit on my credit score. Bankruptcy knocks your rating down to R9 while a consumer proposal only lowers your rating to R7.
I paid Trans Union for an online credit report to compare with Credit Karma. They used a different algorithm and came up with a higher score, but some of the inaccuracies remained, indicating they're Trans Union's fault. I then paid for a credit report using Equifax, it was more accurate and it again confirmed the errors were Trans Union's fault.
Finally there is the issue of annoying spam emails. Every day now I get an annoying nagging email from Credit Karma demanding (not asking) that I "verify my report! 11!" when there's nothing new to "verify". I checked my account preferences to see if these irritants could be stopped, but then I got a nag screen whining that if I stopped these messages I wouldn't receive updates to my credit score. If I start getting more spam from "partners" etc then I will delete my account with them.
Verdict: Credit Karma is a useful way to get A ROUGH IDEA of your credit score. To get a real credit history you need reports from BOTH of the major reporting agencies. Credit Karma offers tools you can use to see what your credit report means and to track your credit score while you're trying to rebuild your credit (as I am). However, if you need your credit information to be accurate and reliable, the only way to achieve this is to go directly to the two credit reporting agencies. Also, if you need to correct inaccuracies in your credit history, the only ways to do this are a) to approach the creditor and get them to revise their report to the agencies; b) to fill out dispute forms with the major reporting agencies. Credit Karma won't, and can't, correct credit reporting errors. Instead, they provide links to do this with Equifax and Trans Union.
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