This will likely disrupt the free credit report industry. Websites which currently offer free credit reports usually do so by making the customer give their credit card, and sign up for a credit monitoring service. Unless the consumer cancels the service before the free grace period ends, they begin getting charged for the credit monitoring. Consumers now have a choice of accessing their credit report for free without having to sign up for a service or give their credit card as part of the deal.
In in addition to disrupting the no-cost credit report industry, it also helps the company differentiate itself from rival free credit score websites such as Credit Sesame and Quizzle. It also helps to differentiate itself from credit card companies which have begun to offer free credit scores to their users. While company spokesperson Bethy Hardeman says that this new service was created to “give customers valuable resources which can help educate them about their credit,” it certainly doesn’t hurt that it also makes the company stand out from the competition.
While consumers have been able to access their credit reports for free through the government mandated website AnnualCreditReport, they are only able to do so once a year. Credit Karma will allow their users to access their credit report as often as once a week, which can be a great advantage when trying to remove incorrect entries from the report. It also helps to keep tabs on how those removals are progressing. With as many of 25% of all credit reports containing incorrect information which can negatively affect the person’s credit score, making sure your credit report is correct is important.
The one “catch” is the credit report is limited to the TransUnion credit reporting agency, and it doesn’t include the credit reports from Experian or Equifax. This could be important because each agency collects different material, so just because your TransUnion report is free from errors, it doesn’t mean the reports for the other two agencies are error free as well. When your TransUnion report is pulled through Credit Karma, it’s considered a “soft-pull” which isn’t shown to creditors and won’t lower your credit score.
For those who are concerned about both their credit score and credit report, and not just one or the other, Credit Karma has created the opportunity to get and keep tabs on both in one place.