In this article, let’s take a look at everything Credit Karma has to offer to Canadians, what it is all about and how to get your free credit report in Canada. Let’s get started.
What is Credit Karma?
Credit Karma is a free tool which provides Canadians with an opportunity to get their credit scores, credit reports, and to monitor your credit ratings free of charge.
Credit Karma, a San Francisco–based company founded in 2007, has shaken things up by offering free, ongoing access to your credit scores and reports from TransUnion and Equifax. You sign up with creditkarma.ca and do not have to register a credit card as is often the case with other sites.
Credit Karma has made transparency central to its business model. The company aims to demystify credit for the average person and make it easy to understand.
Credit scores have been available for free in the US for a while now.
With that said, until now, you had to to pay in excess of $20 or more to obtain credit score in Canada.
Credit Karma In Canada
Credit Karma was founded in 2006 in the United States. In 2016, they expanded their operations to Canada.
The free credit reporting service is available to the provincial residents of Alberta, Ontario, Manitoba, British Columbia, New Brunswick, PEI, Saskatchewan, Nova Scotia, and Newfoundland and Labrador.
Credit Karma also offers users free credit scores, reports, and credit monitoring.
In the US, they also provide free tax filing services as well.
Since Credit Karma offers these great services for free, you might ask the question: “How do they make money?”
The company makes money by providing credit card recommendations and personalized loans to you based on your credit profile and credit scores.
If you happen to apply for one of the credit card offers, the bank issuing the card pays them a referral fee at no additional cost to you. Now, that’s their business model and how Credit Karma functions.
Register To Credit Karma and Get Your Free Credit Score
Signing up for the free credit score and credit monitoring service is pretty easy and straight forward –
Visit creditkarma.ca – Official website of Credit Karma
Key in your basic profile information. Choose if you want to receive regular email updates of the activity on your credit profile (credit monitoring). You may also opt-in for promotional emails if you want to.
Verify your personal identity which is easy as-well.
That’s it, you now have access to the TransUnion credit score free of charge.
So here’s the thing – By checking your credit score online though Credit Karma is referred to as a “soft inquiry” and does not impact your credit score in anyways.
What is a Good Credit Score in Canada ?
Your credit score rating will usually fall into one of the below five parameters.
A credit karma score is a 3 digit number between 300 and 900 that is reflective of how “good” or “bad” you are with debt and paying your bills on-time every month.
The credit score you obtain from the two major credit bureaus in Canada (which are Equifax and TransUnion) might be slightly different, however, they are generally categorized as:
800 – 900 -> Excellent
720 – 799 -> Very Good
650 – 719 -> Good
600 – 649 -> Fair
300 – 599 -> Poor
Like I said before, every Canadian resident will fall into one of the above mentioned credit profiles.
Again, based on the numbers; if you’re considered good and doing ok with finances if credit score which is 650 and above.
Generally, scores between 720-799 are labeled “Very Good,” while 800 and above is considered “Excellent.” This is based on the commonly used score range of 300 to 900.
It’s important to keep in mind that these are just guidelines, though. Different lenders may have different standards for what they consider a good or excellent score.
In other words, a specific score doesn’t guarantee that you’ll be approved for credit or receive the lowest interest rates.
There are also hundreds of different scoring models out there, so you may find that your score differs depending on which model the lender chooses to use.
The higher your credit score the better whether you want to borrow money, get competitive mortgage interest rates or opening a new bank account.
Factors That Determine Your Credit Score
To arrive at your credit score, credit bureaus will take the following into consideration:
Loan repayment history – Be it paying your cell phones bills on time, insurance payments, gas bills; every single bill you get monthly.
Length of your credit history – The longer you are a Canadian resident the better
New credit inquiries on your account – New credit card applications, cell phone provider switch is usually a hard check on the credit file
Credit Karma will provide a credit score that is from TransUnion.
If you’re also interested in looking at more than one report or in other words to get your Equifax credit score, you can obtain it for free from Borrowell.
You can also get your credit score directly from the TransUnion or Borrowell, but these services will cost you money.
Credit Report – What All Does It Contain ?
Your credit karma 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:
List of your credit accounts
Public records and collections
Credit report inquiries
Is Credit Karma Safe & Legit for my information ?
As far I have experienced, yes it is.
In addition, Credit Karma is well secured for your private information.
This is what Credit Karma has to say about how secure they are –
“See that “https” in our URL? The “s” stands for “secure.” We use 128-bit encryption to protect the transmission of your data to our site. In addition, our data centre is monitored around the clock. We use firewalls, third-party experts (to assess our site for vulnerabilities) and other security precautions to protect your identity.”
Also, you get logged off automatically after certain inactive minutes or idle time.
However, Internet is what it is.
Do you remember the Equifax incident a while back ? Their systems were literally hacked and data stolen. With that said, you need to be extremely careful about the data you enter online, especially financial transactions.
Comparison – Credit Karma VS Borrowell
Let’s compare two of the best Canadian Credit Score companies here – Credit Karma and Borrowell. Which of them has the edge ? Let’s discuss the pros and cons here.
I primarily use Borrowell to get my Equifax credit score. Likewise, I generate and get my TransUnion credit score and report from Credit score.
As both of these services are free, I never key in my bank details for personal security and to avoid hassles of un-wanted charges.
Another thing to note here is, both Borrowell and Credit Karma keep updating my score over the period of time, I usually don’t pay money to get my credit scores.
I make it a point to check my scores quite often – every couple of months or so just to be on the same page and make sure I am not missing out on anything,
If your credit score is even descent to good, both Credit Karma and Borrowell will keep sending you the occasional product recommendations for credit cards and other personal loans to your email.
That is, only if you opt in to receive promotional mails from them while registering.
However, you do not need to apply for a credit card or any kind of loans to make use their free service. It’s just product recommendations from the two companies.
In addition, Borrowell occasionally sends out personal loans and mortgages offers.
Borrowell’s unsecured low-interest loans might be attractive to individuals who need loans from an alternative lender for debt consolidation purposes.
Loan amounts can be up to $35,000 with fixed interest rates between 5.6% to 29.19% for a 3 to 5 year term.
Another good to know difference between the two credit report companies in terms of location availability are –
Borrowell services are available to Canadians in all the provinces including Quebec.
Credit Karma is not available in Quebec, Nunavut, the Yukon, and Northwest Territories.
Credit Karma FAQ’s
Some of the most popular questions on Credit Karma and the answers are below –
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.
Why is the score I got from my bank different from your score?
People are often surprised to learn that they can have many different credit scores—potentially hundreds.
Credit Karma features a score provided independently by TransUnion, and calculated using the CreditVision model. But your bank may use a different credit bureau, or a different scoring model.
Though your scores may vary, they’re all based on information in your credit report. Focusing on what’s in your reports and tracking just one score over time could help you build your credit overall.
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.
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.
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.
Federal law mandates that everyone has the right to one free credit report from each of the big three credit-reporting companies – Equifax, Experian and TransUnion – every 12 months.
To obtain a copy, consumers have to apply through AnnualCreditReport.com, the official credit-report site. But these reports don’t include your credit score, which is an important financial figure everyone should know. In the past, the only way to obtain it was by purchasing the score directly from each agency, which often came at a hefty price.
Please let us know your thoughts and comments below.
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Hey, I’m Sagar from Toronto, Canada.
I am a self-taught, motivated Canadian Personal Finance Blogger who loves writing articles about Savings, Investing, Stocks & ETF reviews, Side Hustles, Frugal Living, Credit Cards and Retirement Planning. Husband. Father. Software Developer. Web Designer. Hiking Enthusiast.