At Finovate 2008 I had the chance to meet with Ken Lin, the CEO of Credit Karma.
The former E-Loan executive described his company as a consumer friendly alternative to the subscription based credit report offerings. CreditKarma lets consumers use totally free tools to
-Check credit score
-Compare credit score to others
-Simulate how certain actions may affect your credit score, like taking out a new loan
or paying down balances
CreditKarma runs on an advertising based business model. In addition to traditional display advertising running on the site, they feature what they call Karma Offers, or specific product offers that are tailored to your specific credit profile. The Offers are further vetted by a comment and voting mechanism, with popular and recommend offers naturally getting the most promotion.
I signed up myself, and enjoyed the ease and utility of the service it offers. Advertisers likely also are delighted by the targeted consumers that the Karma Offers product can deliver.
Interesting, I just signed up myself!
The only problem I see with this site is the confusion it will bring people when they finally do apply.
This site does not use FICO scores, and FICO scores are what 90% of the lenders use as the defining score.
This is using the "experian" or "equifax" score, and it is not telling people that this is not their official FICO score. Experian, Equifax and TransUnion have tried to mimic Fair Issacs scoring to come up with a credit score, but it is not the same as Fair Issacs scoring of their data and a lot of times is quite a ways off.
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