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Nathan Reiff has been writing expert articles and news about financial topics such as investing and trading, cryptocurrency, ETFs, and alternative investments on Investopedia since 2016.
Updated May 30, 2024 Part of the Series How Companies Make MoneyRetail and Manufacturing
CURRENT ARTICLECredit Karma is a personal finance company that offers consumers free access to credit scores, credit and identity monitoring, a credit report dispute tool, and customized recommendations for credit card, loan, and insurance products.
The company makes money by earning a commission when a consumer completes the purchase of a product that it recommends.
Credit Karma uses AI to power a platform that provides tools that consumers can use to manage all aspects of their financial lives. In addition to the services mentioned above, it offers:
The company recommends credit cards and other financial products that fit consumers, based on the odds of approval and their credit scores.
Credit Karma's parent, Intuit, operates in the Software-Application industry within the Technology sector.
Credit Karma became part of the global financial technology platform of Intuit in 2020.
Credit Karma's mission is to put the power of technology, data, and AI to work to make personal financial management easier and stress-free. With so many financial services companies vying for the attention of consumers, its strength lies in making custom recommendations for financial products based on someone's finances and credit standing.
Credit Karma's competitors include NerdWallet and Credit Sesame, both of which also offer free credit score information and financial tools. In addition, Intuit states that its business segments, including Credit Karma, face intense competition from:
Credit Karma has incorporated popular features of the the online budget planner, Mint.
Credit Karma is one of four segments of the financial services company, Intuit. Its revenue comes primarily from cost-per-action transactions. These result in e.g., credit card issuances and personal loans. It also earns revenue from online advertising that generates leads relating primarily to mortgage and insurance. Credit Karma Money also generates revenue for the segment.
Intuit's 2023 annual report reported the segment's financial results for the 2023 fiscal year (FY). Additionally, on May 23, 2024, the company announced financial results for the quarter ended April 30, 2024.
For FY 2023, revenue was $1.63 billion, a decrease of 9% from the previous year's $1.8 billion. For the third quarter of FY 2024, revenue was $443 million, an increase of 8% over the previous year's third quarter.
Credit Karma accounted for 11% of Intuit's total revenue in FY 2023 and 7% of total revenue in Q3 2024.
For FY 2023, operating income was $428 million, a decrease of 19% from the previous year's $531 million. For the third quarter of FY 2024, operating income was $110 million, a decrease of 1% from the previous year's third quarter.
Credit Karma was founded in 2007 by Kenneth Lin, Ryan Graciano, and Nichole Mustard. It is headquartered in Oakland, Calif.
CEO Kenneth Lin spent the early part of his career at E-Loan, an online lender specializing in debt consolidation, and UPromise, a subsidiary of student loan service Sallie Mae which runs a customer loyalty program focused on saving for college and paying down student loans.
Co-founder Ryan Graciano is the company's chief technology officer (CTO). He is responsible for the company's engineers who oversee the creation of new products.
Co-founder Nichole Mustard left Credit Karma in 2023.
In December 2023, Credit Karma launched a new feature that would provide members with up to five days earlier access to government funds than is usual through financial institutions. Members can tap into their Social Security benefits, Veteran's Administration benefits, and Supplemental Security Income (SSI) by enrolling in Credit Karma's early direct deposit program.
The company makes money primarily from the fees it earns when a customer completes a transaction that starts with a tailored recommendation on its personal finance site. This might involve a financial product such as a credit card or personal loan.
In December of 2020, Credit Karma became part of the publicly-traded financial technology firm Intuit when the latter acquired Credit Karma for approximately $3.4 billion in cash and equity valued at $4.7 billion.
Yes, the Federal Trade Commission found that Credit Karma falsely informed customers that they'd been pre-approved for credit products. Yet they were denied approval when they applied. Credit Karma made a financial payment to settle with the FTC in January 2023.
Credit Karma is a personal finance company that is owned by Intuit. It provides free access to credit scores and other credit services as well as personalized recommendations for credit cards, loans, and insurance.
It makes the majority of its money when people click through its site and complete transactions for financial products offered by other providers.
Article SourcesThe offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.
Description Part of the Series How Companies Make MoneyRetail and Manufacturing
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