Credit Karma provides Canadians with an opportunity to obtain their credit score, credit report, and to monitor their credit free of charge. Credit scores have been available for free over the Southern border for a while. However, until recently, you were required to pay $20 or more to obtain your credit score in Canada. These days, online financial services companies like Borrowell, Credit Karma, and Mogo, offer Canadians access to a free credit score that is regularly updated.
About Credit Karma
Credit Karma was founded in 2006 in the United States. In 2016, they expanded their operations to Canada and are available to residents of Alberta, Ontario, Manitoba, British Columbia, New Brunswick, PEI, Saskatchewan, Nova Scotia, and Newfoundland and Labrador. Credit Karma offers users free credit scores, reports, and credit monitoring. In the U.S., they also provide free tax filing services.
Since Credit Karma offer these services for free, it begs the question: “how do they make money?” The company makes money by providing credit card recommendations to you based on your credit profile. If you apply for one of these credit card offers, the bank issuing the card pays them a referral fee at no additional cost to you.
Signing up for the free credit score and credit monitoring service is easy.
- Visit CreditKarma.ca
- Enter your basic details and choose if you want to receive email updates of activity on your credit profile (i.e. for credit monitoring). You can also opt-in for promotional emails if you want.
- Verify your identity.
- You now have access to your TransUnion credit score free of charge.
Checking your credit score online though a service like the one Credit Karma provides is referred to as a “soft inquiry,” and does not lower your credit score (has no impact).
What is Considered a Good Credit Score in Canada?
A credit score is a 3-digit number between 300 and 900 that is reflective of how “good” or “bad” you are with debt. The credit score you obtain from the two major credit bureaus in Canada (Equifax and TransUnion) may be slightly different, however, they can generally be ranked as:
800 – 900 → Excellent
720 – 799 → Very Good
650 – 719 → Good
600 – 649 → Fair
300 – 599 → Poor
Based on the numbers above, a “good” credit score is technically any score over 650. The higher your credit score, the better your chances at snagging a competitive interest rate when you want to borrow money.
To arrive at your score, credit bureaus take the following into consideration:
- Your loan repayment history
- Total debt
- Length of your credit history
- New credit inquiries on your account
- Your credit mix
Credit Karma provides a credit score that is obtained from TransUnion. If you also want to see your Equifax credit score, you can obtain it for free through Borrowell. You can also obtain your credit score directly from the credit bureaus, but this service comes at a cost. Click here for more on how your Canadian credit score is calculated.
What’s in a Credit Report?
Your credit report shows details of how you have used debt over time. In addition to your credit score, a lender also looks at what is on your credit report. Some of what credit bureaus record on your credit report include:
- Personal information
- List of your credit accounts
- Public records and collections
- Credit report inquiries
- Consumer statements
In Canada, credit bureaus are obligated to provide you with one free copy of your credit report per year if you request it. Companies like Credit Karma and Borrowell provide free monthly credit reports when you sign up with them.
Is Credit Karma Safe/Legit?
As far as I have experienced, yes. For the roughly 1 year I have used the service, I have never had to enter my credit card information or Social Insurance Number. I get the occasional email with credit card offers, but I never bite and that has not been an issue. Free has been “free” so far.
With regards to the security measures in place to protect your private information, Credit Karma say they use “128-bit or higher encryption to protect the transmission of your data to our site” and “do not share your personal information with unaffiliated third parties for their own marketing purposes.” That being said, the internet is what it is. If you remember, Equifax (a major credit bureau) was hacked a while back, so there is no iron-clad guarantee when you are online in my opinion.
Credit Karma vs. Borrowell
Credit Karma and Borrowell are my go-to’s for free credit score monitoring. I get the Equifax credit score and report via Borrowell, and TransUnion credit score and report via Credit Karma. Since both are updated regularly, I have no need to subscribe to a credit monitoring service. Both Credit Karma and Borrowell will send occasional product recommendations for credit cards to your email, if you opt in while registering. However, you do not need to apply for a credit card to use their free service.
In addition to credit score/report, Borrowell also provides personal loans and mortgages. Their unsecured “low-interest” loans are attractive to individuals who need loans from an alternative lender for debt consolidation purposes. Loan amounts are up to $35,000 and come with fixed rates between 5.6% to 29.19% and a 3 to 5 year term.
Borrowell is available to Canadians in all provinces, including Quebec. Credit Karma is not available in Quebec, Nunavut, the Yukon, and Northwest Territories.
Other Credit Karma FAQs
Some other popular questions people ask about Credit Karma and their answers are below:
1. Will Using Credit Karma Hurt or Lower Your Credit Score?
No, credit score inquiries that you make for yourself are known as a soft inquiry and do not impact your credit score one way or another.
2. Does Credit Karma Require a Credit Card To Sign-up?
No, your credit card information is not required and there is no fee for accessing your free credit score.
3. Do You Need Your Social Insurance Number To Check Your Credit Score?
No, providing your social insurance number (SIN) is optional and you can access your free credit score even if you do not disclose it during the sign-up process.
4. What is Credit Karma’s Phone Number?
They do not offer phone support, however, you can submit your questions through their website support page and they will respond to you via email.