Why Credit Karma’s Free Credit Monitoring Misses the Mark


Last week, Credit Karma announced that it was the first company to offer a “free credit monitoring service.”

How it works is relatively simple. Once you enroll at CreditKarma.com, the company monitors your credit report for free on a daily basis.

If a “significant change” occurs in your credit file, the action is logged and an e-mail alert is sent to you.

For the record, they seem to have a pretty loose definition for “significant change,” so anything from a credit inquiry, delinquent payment, or even improved payment history will be included in these alerts.

On top of this, Credit Karma will also keep a running list of the your credit score, payment history, debts, etc. so it’s easy to reference in the future.

This is all great news. It sounds like it does operate exactly like many of the credit monitoring programs out there.

It Only Monitors One Credit Bureau

But there’s one huge problem. Credit Karma only provides you with one of the 3 credit scores available.

They provide a free credit score from TransUnion, known as the “TransRisk” score.

And while there has been some debate as to how accurate this credit score, that isn’t really the issue at hand here.

The problem is that you’re missing your credit scores from the other two major credit bureaus, Equifax and Experian.

And because you’re missing your credit scores, you’re also missing the associated data from these two credit bureaus.

This is a major issue because the credit bureaus don’t all report the same exact data, nor do they report it at the same time, or in the same fashion.

Single Bureau Credit Score Monitoring

So you’re essentially receiving single-bureau credit monitoring for free, which obviously doesn’t give you the complete picture.

Sure, all three credit bureaus may be in sync most of the time, but what if something negative happens and only Experian picks up on it? Or only Equifax reports it?

Then you’ll be in the dark until TransUnion gets around to reporting the data in question. In the meantime, you could be the victim of something as severe as identify theft.

It’s kinda like getting an alarm system for your house that only monitors your front door, while doing nothing to prevent a break-in through your back door.

For this reason, it’s not really a complete credit monitoring solution. And somewhat meaningless if you want to know everything that’s going on with your credit file.

Of course, for the price of free, it’s not a bad deal by any means. I just felt it was worth pointing out that you won’t necessarily see everything you need to see.

(photo: pulguita)

By Colin Robertson

Colin created this blog after spending several years in a job that required him to scour credit reports on a daily basis. His goal is to help individuals better understand their credit and get the most out of credit cards.

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