Credit karma is brilliant app letting users know their credit scores for free. By knowing their credit scores users can actually plan their lifestyle for a better
financial status. Credit scores play a very crucial role in every person’s life, especially when he/she is willing to apply for a loan.The financial institutions consider the credit scores as a major part while offering loans to the customers.
What is a credit score?
These credit scores are used by lenders to assess the credit worthy of a borrower.A borrower having a low credit is usually offered a subprime mortgage with higher interest rates than a normal mortgage.This is because, since low credit scores means that the borrower is low credit worthy to receive a loan which in turn increases the risk for the banking or financial institutions offering loan.A credit score lies between 300 to 850, the lowest credit score is 300 with 850 being the highest.A borrower can achieve a maximum credit score of 850.Any credit scores less than 600 is considered to be a bad credit score and lands borrowers in getting a mortgage at higher rates.Generally, a borrower with credit scores less than 600 is offered a subprime mortgage.So, it is better to maintain a good credit score for each and every borrower.
Credit Karma offers free credit scores:
Prior to 2007, there was no free access to credit scores of any consumer.For a consumer to know their credit score they had to pay huge monthly fees.But according to the federal law, every consumer has a right to one free credit report from the credit reporting companies like Transunion, Equifax, and Experian.Anyhow, the consumer has to apply through ” AnnualCreditReport.com”. Every individual should have a right to his own credit scores at any time, so that the consumer can improve his
financial credit accordingly. This is where credit karma has come into play, with the idea of providing free credit scores to its users. This is a revolutionary idea which helped a lot of consumers know their creditworthiness.Credit Karma displays ongoing credit scores of every user who is registered at
Credit Karma.Don’t worry, Credit Karma does not share your personal information with anyone.
Advantages of using Credit Karma:
Credit Karma offers free credit scores and credit reports from Equifax and Transunion. Users can check their credit scores at any time.
These credit scores benefit borrowers a lot. Credit Karma also makes suggestions on how a user can improve his/her credit. Credit Karma also displays advertisements which are very relevant to the financial situation of the users. For example, credit karma displays where a borrower can get a better loan with low-interest rates. By this, the banks charging higher interest rates will be affected and the banks with low-interest rates get benefitted.
So how does credit karma generate money?:
As mentioned earlier credit karma displays advertisements which are relevant to the customer credit reports and credit scores.So these advertisements really add to the value of both the advertisers and also the customers, increasing the lead generations. The biggest advantage of these ads is that they are displayed to the right audience and that too at the right time. Suppose if a customer has a mortgage at some bank and he is paying heavy interest rates to that bank, now what this credit karma does is that it displays the advertisements of banks which offer loans at a low-interest rates.So the customer can switch to the bank which provides mortgages at lower interest rates.This benefits not the only the customers or the banks providing lower interest rates but also the Credit Karma.