The expansion of Credit Karma to Canada in 2016 increased Canadians’ access to free credit score services.
Before Credit Karma arrived in Canada, Borrowell and Mogo had already eliminated fees for checking credit scores and reports.
Nevertheless, Credit Karma’s expansion has improved competition among the existing credit score service providers, making it challenging for Canadians to decide on which to choose.
The major challenge arises from the fact that the free credit score service providers offer similar products and services with only slight differences. For those that want to make an informed decision, understanding the “slight differences” is worthwhile.
So what does Credit Karma bring to the table? Why should you use it instead of Borrowell or Mogo?
In this Credit Karma Canada review, you will understand what the company entails and how it differs from other free credit score service providers in Canada.
Table of Contents
Who is Credit Karma?
Credit Karma is an American-based financial technology company that was founded in 2007. While the company specializes in providing credit scores and credit reports, it also offers financial products and educational resources.
Following its success in the US, Credit Karma expanded to Canada in 2016 to provide competition to existing free credit score service providers in the country such as Borrowell and Mogo.
The company offers free credit scores, reports and monitoring services based on the TransUnion model. Like other free credit score service providers in Canada, Credit Karma also recommends personalized affiliate products to its clients such as personal loans, credit cards and mortgages.
Finally, Credit Karma has more than 60 million clients across the US, UK and Canada. But in Canada alone, Credit Karma has about 1 million clients.
Is Credit Karma Legit and Safe?
The short answer is yes. The free credit score services, financial education and affiliate products offered by Credit Karma are legit.
As per security, Credit Karma protects your information on its platform with advanced 128-bit encryption.
Once your Credit Karma account is inactive for a particular period, it will be automatically logged out to your advantage. And the company will notify you once it suspects any suspicious activity on your account.
Interestingly, the security structure of Credit Karma is assessed, confirmed and validated regularly by independent third-party experts.
However, the only concern you may have is that Credit Karma discloses your personal information to third-party affiliate companies for marketing purposes.
This is so Credit Karma can earn a commission by recommending no-obligated products to its clients as it doesn’t charge its clients any fee for checking their credit scores and reports on its platform.
What Does Credit Karma Canada Offer?
To beat the competition, Credit Karma came with unique offerings some of which are not available on the existing free credit score service providers in Canada.
This section provides an in-depth view of Credit Karma Canada’s offerings.
1. Credit Score Services
In order to match up with the competition, Credit Karma has to offer free credit score and credit report services to its Canadian clients. And this is the popular offering the company is known for.
The major difference is that Credit Karma uses the TransUnion credit model when pulling credit scores and credit reports.
On Credit Karma, free credit scores and reports are provided weekly. However, Credit Karma monitors the credit of its clients daily to update them against any suspicious activity on their credit reports.
Additionally, Credit Karma offers free identity protection and free credit-related educational resources to help protect the identities and improve the credit health of its clients.
Beyond credit score services, every other product and service on Credit Karma is offered by partner companies.
2. Credit Cards
Credit Karma partners with several credit card providers in Canada — including RBC, BMO, Scotiabank & CIBC — in order to provide its clients with easy access to the best credit card deals out there. Again this practice is common among other free credit score service providers in Canada.
From cashback credit cards, reward cards, and balance transfer cards to low-interest cards, Credit Karma offers access to different categories of credit cards in Canada.
One advantage of this is that you can access a credit card through Credit Karma regardless of your credit score.
However, since these credit cards are affiliate products, you should expect the eligibility, interest rates and fees to vary across credit cards and credit providers.
But if you don’t want to waste your time comparing which card to choose, go straight to our compilation of the best credit cards in Canada.
3. Personal Loans
Through its partnership with LoanConnect, Credit Karma also offers access to different personal loans in Canada.
LoansConnect is a popular loan search engine in Canada that advertises the personal loans of partner lenders.
The search engine is accredited by Canadian Lenders Association (CLA) and Better Business Bureau (BBB) with an A + rating.
The personal loan amounts on LoansConnect range from $500 to $50,000 and the APR ranges from 5.99% to 46.96%. Interestingly, you can pay off the loan with a flexible repayment term of 3 to 120 months.
When applying for a LoansConnect loan, you should consider not only the annual interest rates, origination fees, prepayment penalties and any other applicable fees.
Through its partnership with Nesto, Credit Karma also offers Canadians access to fixed and variable mortgages. Nesto doubles as a mortgage provider and a mortgage broker that partners with 1000+ lenders including the big banks.
In addition to 1% cashback on mortgage amount and 150-day rate lock, Nesto also offers some of the best mortgage rates in Canada. Below are the current Nesto mortgage rates.
|2-year fixed term
|3-year fixed term
|3-year variable term
|4-year fixed term
|5-year fixed term
|5-year variable term
Unlike other mortgage brokers, Nesto doesn’t pay its mortgage advisors through commissions. This allows them to offer unbiased mortgage solutions.
But because Nesto is not a full-fledged mortgage brokerage, it can easily be biased in prioritizing its products over better mortgage deals. Moreso, you can’t access a mortgage on Nesto if you have a poor credit score.
Credit Karma Canada Pros and Cons
So far we have discussed what Credit Karma Canada entails including its offerings. Based on this information, we can now identify the following pros and cons of the company in Canada.
- Free credit score services: From credit scores, credit reports, and credit monitoring to identity protection, Credit Karma doesn’t charge its clients a dime.
- Free educational resources: Credit Karma offers free educational articles that help you avoid mistakes when improving your credit health.
- Personalized financial products. In exchange for sharing your personal data with its affiliate partners, Credit Karma recommends personalized financial products that will help improve your credit score.
- Tight security: Credit Karma has a tight security architecture that provides maximum protection for your data on its platform.
- Limited products: Compared to other fee credit score service providers in Canada, Credit Karma has the lowest collection of products. This may not be a problem if you’re only looking for credit-related services.
How to Open a Credit Karma Account in Canada
Account opening on Credit Karma takes just a few minutes as everything is done online. But who can open a Credit Karma account in Canada? Below is the eligibility:
- Live in any Canadian province/territory (excluding Nunavut, Northwest Territories, Quebec and Yukon)
- Reach the age of majority in your province/territory
As you can see, the eligibility is flexible and they’re common with the requirements of other free credit score service providers in Canada.
Once you meet the eligibility, you can click on this link to initiate the application for your Credit Karma account. The application is free and will not impact your credit.
Credit Karma Canada Alternatives
Before Credit Karma, Borrowell and Mogo had already eliminated the fees Canadians used to pay when checking their credit scores at credit bureaus. It used to be $20 on average.
Today, Canadians have the opportunity of choosing between three major free credit score service providers — Borrowell, Mogo and Credit Karma.
Although some Canadian banks (such as the big banks) are now offering free credit score services to their customers. However, such service is limited compared to the comprehensive solutions of Borrowell, Mogo and Credit Karma.
That being said, let’s now take a brief look at how Credit Karma compares with Borrowell and Mogo.
Credit Karma vs Borrowell
Free credit score service was first started by Borrowell in Canada before Mogo followed the lead. With this offer, Borrowell helps Canadians save costs by checking their Equifax credit scores and reports.
Even though Credit Karma and Borrowell differ in terms of the credit bureaus they use, they both offer free weekly credit scores and reports.
Like Credit Karma, Borrowell also makes money by recommending affiliate financial products to its clients. These products range from bank accounts, credit cards, personal loans, mortgages, insurance and investment products.
With these similarities, you can’t make the wrong decision with either Credit Karma or Borrowell. But since the two companies use different credit bureaus, you should consider using both to have a broader view of your credit profile.
This is because TransUnion has a different scoring model compared to Equifax. And because they are the two major credit bureaus in Canada, getting their credit scores and reports will give you more reliable information.
But if your bank offers free credit scores and reports from any of the two major credit bureaus, you don’t have to use both Credit Karma and Borrowell.
Credit Karma vs Mogo
Mogo was the latest free credit score service provider in Canada before Credit Karma joined the race in 2016.
Among the three major free credit score service providers, Mogo has distinguished itself with a robust collection of products.
In addition to offering free Equifax credit scores, credit reports and monitoring services, Mogo also offers identity protection.
Although the free identity protection lasts for only 90 days with the unlimited free version accessible when you activate a Mogo card. But with Credit Karma, identity protection is unlimitedly free.
That being said, Mogo offers self-owned and partner products such as prepaid cards, personal loans, mortgages, Bitcoin and investment platforms.
One unique aspect of Mogo is that it proactively supports the fight against climate change. In addition, Mogo is publicly traded on Canadian and American exchanges such as TSX and NASDAQ.
That being said, my position on Credit Karma vs Borrowell also stands on Credit Karma vs Mogo. That’s, you can’t go wrong with any of them.
But if your bank doesn’t offer free credit score and report services, you can use both Credit Karma and Mogo since they’re all free.
Learn more: Mogo Review
Verdict on Credit Karma Canada Review
We’re opportune to be in an era where checking credit scores and reports doesn’t cost a dime. With three major free credit score service providers, Canadians have the luxury of choosing from multiple options.
Credit Karma has a comparative advantage as it extracts data from TransUnion while Borrowell and Mogo extract from Equifax. As a result, you can decide to use Credit Karma alone or use it alongside Borrowell or Mogo.
Hopefully, now you’re more informed about what Credit Karma Canada entails and how it compares to Borrowell and Mogo. If you have any questions or concerns, kindly drop them in the comment below.
Credit Karma Canada Review FAQs
Is Credit Karma accurate in Canada?
Credit Karma credit scores and reports are accurate in Canada as per the credit model of TransUnion. It is expected for Credit Karma credit scores and reports to differ from those of other credit service providers because of the differences in the factors used in determining the information.
Why is my Credit Karma score higher than Borrowell?
That only shows the difference between Equifax’s credit scoring model versus TransUnion’s scoring model. Credit Karma extracts information from Transunion while Borrowell extracts information from Equifax. However, both Credit Karma scoring and Borrowing scoring are accurate based on the factors used in calculating them.
What is the downside of Credit Karma?
The major downside of Credit Karma is that it has limited products compared to other free credit score service providers in Canada.
Does Credit Karma hurt credit score?
No. Checking your credit score and report on Credit Karma can’t hurt your credit score. However, your credit score may be affected when you apply for a loan through Credit Karma because lenders perform a hard check when determining your eligibility.
Is Credit Karma free?
Credit Karma is 100% free when it comes to checking credit scores and reports, credit monitoring and identity protection.