Credit Karma Canada Review 2020: How To Get Your Free Credit Score And Credit Report
Accessing your credit score and credit report for free has never been easier. As this Credit Karma Canada review highlights, FinTech providers have brought these to the Canadian marketplaces and made them readily available for our benefit.
Understanding and tracking your credit information is an effective tactic as part of your money management system. It’s not going to get you rich or drastically shift your financial journey. However, if you’re looking to improve your credit score, monitor your financial records for security or just want to make personal finances a priority, it’s a great habit to keep.
Thankfully, services like Credit Karma have made this an easy, user-friendly and free process for everyday Canadians.
What Is Credit Karma?
Credit Karma is a financial services company operating in the United States and Canada. Their website states that “our job is to give you the tools, the education and the opportunities you need to make real, meaningful progress.”
The company is American based and was founded in 2006 with their headquarters in San Francisco, CA. Credit Karma brought their services to Canada in late-2016 and their total global user base is over 75 million sign ups.
Is Credit Karma Safe To Use & Are They Legit?
Data protection and security needs to be at the forefront of our concerns when it comes to financial services. Based on Credit Karma’s reputation and details listed on their website, as well as the investment funding and positive media coverage they’ve received, Credit Karma is indeed 100% safe and legit.
Security and data protection is noted throughout Credit Karma’s website and during the registration process.
- Credit Karma uses 128-bit encryption to secure the transmission of data
- Your Credit Karma account is read only – you aren’t able to execute any transactions of financial actions on their website
- The company is independently certified by digicert
Finally, as noted on their website, “we do not share your personal information with unaffiliated third parties for their own marketing purposes.”
So What Is The Catch With Credit Karma?
There are no hooks, gimmicks or tricks with the free aspect to Credit Karma and their services. It’s a legitimate service that hundreds of thousands of Canadians actively use (and then of millions in the United States).
If you’re looking to monitor your credit score and report for free, that’s what they do. In the section below we’ll cover how Credit Karma makes money with financial services referrals. However, you can be rest assured to know there are no catches to Credit Karma.
Is Credit Karma Free? How Does Credit Karma Make Money?
The Credit Karma Canada credit score and report service is entirely free. No loopholes and no credit cards are required during the registration process. This isn’t the type of service that gives you one free report and then asks for payment or a subscription moving forward.
So how does Credit Karma make money? They generate revenue by referring you financial services from their partner providers. Those products and service recommendations will be personalized to your financial data and could include credit cards, personal loans, mortgages and others.
If you were to register or purchase one of these services based on Credit Karma’s recommendation, they would be paid a referral fee. Essentially, it’s in the same vein as affiliate marketing and sponsorships.
There is absolutely no obligation for you to consider these services and they aren’t overly pushy promoting them.
Who Is Eligible To Sign Up For Credit Karma?
Credit Karma Canada is technically not “fully Canadian” yet. As it stands now, Quebec, Nunavut, the Yukon or the Northwest Territories are NOT able to take advantage of Credit Karma’s free credit score and report services.
However, all other Canadian residents who can verify their identity are able to register for free and start using Credit Karma’s services immediately.
The registration process takes only a few minutes, valid email account and general personal information that financial services require to get started.
Is It Bad To Check Your Credit Score On Credit Karma?
No, there are zero drawbacks to checking your credit score, report or monitoring your credit on their platform. As noted again below, it’s technically a “soft pull” on your credit. A soft pull is a credit request made on your behalf (not a financial institutions) and it won’t affect your credit score.
Your credit score will NOT be affected by using Credit Karma.
Credit Karma Canada Free Credit Score, Report & Monitoring Services
Credit Karma gives Canadians free access to their credit score and report plus credit monitoring. I’ve used Credit Karma since mid-2017 and it’s become a consistent tool in my overall personal finance management system.
You won’t be required to enter your credit card information or only have limited-time free access. This is a 100% legit service that is reputable and well-respected.
Credit Karma is technically doing a “soft” pull on your credit reports and thus won’t affect your credit score. In comparison, generally when you apply for a new credit card or other financial service requiring credit those companies will run a “hard” pull on your credit.
Your free Credit Karma Canada account will provide you:
- free credit score calculated by TransUnion using the CreditVision® model
- free credit report from TransUnion including your accounts, credit inquiries and personal information
- free credit monitoring
The Credit Karma Dashboard will display your credit score in a visual graph to highlight it’s movement over time. Plus list all your financial accounts that appear on your TransUnion credit report – both open and closed. In addition they include Collections, Bank Accounts and Public Records that might be on your credit report.
The final information included on your Dashboard will be the history of hard Credit Inquires.
Credit Karma updates your credit score and report every Sunday. It’s not a real-time service that you can actively monitor daily for fluctuations. Every 7 days, on Sunday, your credit information is updated and you can login and review for free.
As mentioned above, Credit Karma also shares recommended financial products, including loans and credit cards. These recommendations are based on your credit score and seek to help you save money or best align you with potential mortgages, car loans, personal loans, student loans and credit cards.
Another great feature is the Credit Karma Blog. They have articles, editorials and opinion pieces on topics ranging all areas of personal finance. It’s a helpful service to support you on your mission to take control of your money and life should you want to browse some free articles.
What’s The Difference With Credit Karma vs. Borrowell In Canada?
Another popular provider of free credit scores and reports in Canada is Borrowell. Borrowell is a 100% Canadian company that was founded in 2014 and has become one of Canada’s largest online FinTech companies.
As stated on the Borrowell website, their goal is to help Canadians make great decisions about credit.
The Borrowell credit score and reporting service is entirely free. Similar to Credit Karma, no hooks or gimmicks. Borrowell has served over 500,000 Canadians with their free credit score and report service.
So how does Borrowell differ from Credit Karma? As mentioned above, Credit Karma calculates your credit score via TransUnion using the CreditVision® model. In comparison, Borrowell provides your free credit score based on the Equifax proprietary model.
The credit scores from these two providers might differ slightly. If you want to get a holistic view of your credit score and report, you could sign up for both. Both Credit Karma and Borrowell are free so there is no harm in having access to both.
Sign Up To Credit Karma To Get Your Credit Score For Free In Canada
If you’re ready to get started and sign up to Credit Karma Canada today, just click the button below. As noted a few times, it’s entirely free and you won’t need to input your credit card, PayPal or any payment information.
The registration process is quick and simple.
SIGN UP FOR CREDIT KARMA TODAY FOR FREE
After completed, you will be able to login as you please to review your credit score and report. Every Sunday that credit information will update to show any adjustments to your records.
Understanding Your Credit Score
So you decided to sign up with Credit Karma (and Borrowell) to track and monitor your credit score and report. Great job! However, what does your credit score actually mean? What are the benefits to tracking it? What is a good credit score?
Here is some additional details around credit scores and reports to ideally clear the air and help you understand the concepts.
What Is A Credit Score?
A credit score is a indicator of your financial health or creditworthiness. It gives potential lenders an indication of the risk you might present should they decide to borrow you money.
Your credit score is based on the information found in your credit report. What is a credit report? A credit report is a holistic summary of your financial history focusing on how you pay your financial obligations and your borrowing activity.
A calculation based on all that information is then made to determine your credit score for prospective lenders.
What Is A Good Credit Score?
The subjective determination of the “good” or “bad” will depend on how the lendor views it. A credit score of 750 or 850 in Canada isn’t very different in terms of the impact on your financial journey.
Here are the broad ‘rule of thumb’ credit tiers.
- Excellent Credit: 750+ (US) | 780+ (Canada)
- Good/Very Good Credit: 700 – 749 (US) | 720 to 779 (Canada)
- Fair/Good Credit: 650 – 699 (US) | 650 – 719 (Canada)
- Poor/Average Credit: 600 – 649 (US & Canada)
- Bad Credit: 300 – 599 (US & Canada)
Your credit score will continually move up and down depending on specific factors and activity on your credit report.
Which Factors Determine Your Credit Score?
Payment History (35%)
The largest determinant of your credit score is your payment history to lenders and creditors. Ultimately this showcases whether you are paying your bills, loans and money owed on time.
Amount Owing & Credit Utilization (30%)
The second factor of your credit score comes from the total debt owing and your credit utilization. If you have $20,000 in total available credit and your amount owing always falls in the $15,000 range, you have a high credit utilization at 75%. A high utilization will negatively impact your credit score.
Credit History Age (15%)
The third factor determining your credit score is related to the age of your credit accounts. This includes both the oldest credit account you have and the age of all your credit accounts. In the eyes of the bureaus and lenders, having “older” credit is better as it showcases a longstanding ability and experience of managing credit.
Recent Credit Applications (10%)
When lenders submit an application you’ve submitted for some form of credit, generally that requires a “hard pull” on your credit report. They’re sourcing your credit report to determine whether they want to lend you credit. Several inquiries in a short time frame can hurt your credit score.
Credit Types Used (10%)
The final factor determining your credit score is the type of credit accounts you have. There are two basic types of accounts: revolving accounts and installment loans. Within those accounts there are different assets, like cars, homes, credit cards, student loans, personal loans, etc.
What Are The Benefits Of Monitoring Your Credit Score?
The ability to access credit and receive optimal credit rates are the net positives of having a high credit score. There are also benefits of monitoring your credit score and report as part of your general financial upkeep system.
Some of these benefits include:
- Improving your credit score is much easier when you’re actively monitoring your credit score and the different areas of your report.
- Refinancing or adjusting credit becomes an opportunity as your credit improves. You might qualify for lower interest rates on your mortgage, student loans or personal loans.
- Avoiding fraud in this digital age of identity theft and security breaches, monitoring your credit score ensures you can identify any fraud issues on your credit report as soon as possible.
Conclusion: Credit Karma Canada Review
Staying on top of your personal finances is the ideal mindset for those looking to make improvements and continue to reach their financial goals. Monitoring your credit score and credit report for free is just a small piece in the puzzle that is money management.
What service do you use to track your credit score for free?
Have you ever had to deal with any credit fraud or financial security issues?
Let me know in the comments below.
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