At some point in your life, you are going to want to get a loan from a bank. This could be for many reasons ranging from getting a loan to setup your own business idea to just getting a mortgage, everyone will get one at least once. Banks will normally be more than happy to lend you money, but of course they will need to look at the paper work first, this is where a credit score comes in. Credit score checkers offer a service that will look at all past loans and credit cards that you have ever used and will rate you based on factors such as: time taken to pay the loan back, the ease of repayments and some may look at the funds in your bank accounts to rate you.
Credit checkers have been cropping up all over the place lately, many of these will provide a good service, however most will also charge a fair few pennies to do this for you, some others are even worst and promise to offer a good service but are actually online scams and will not only take the money you willingly paid them to check your credit score but will also attempt to scam you out of any money that you possess in your bank account when they “calculate” your credit score.
Today I will be pitting two of the best free credit checkers out there on the internet against each other, Credit Karma which was founded in 2007, and Credit Sesame which is a newer company, founded in 2010. I can hear you all calling the first question already, “Are these credit checkers actually free? Isn’t there always a catch with these kind of things?” Well while it may seem too good to be true, no there are no hidden traps, no small print, these are both free, for life.
So how are they free?
Most credit checkers claim that they are free to use for life but to sign up you require a credit card to even create an account. After the initial startup you usually would not be charged for the first month however most companies that are credit checkers like these two automatically set you up on a monthly recurring payment scheme where you have to pay monthly. Some people don’t realise that they are on this scheme and cancel after only one month of payment has been charged. Others don’t realise for a couple of months and the bills for the service build up very quickly depending on how quick you realise and cancel it. How do they make their money then? Well first Credit karma used a type of advertisement to pay their bills. Every so often you may get an email telling you about the newest way to save money or improve your credit score, this is their form of advertisement and you can completely ignore them if you like and continue to use Credit Karma for free. Credit Sesame make money by showing their users adverts for financial products such as loans or credit cards, when their members purchase these products Credit Sesame then receive a commission of this sale.
Credit Sesame offers consumers a premium subscription that starts at $14.95 per month. The premium subscriptions include items such as a full credit report issued by all three credit bureaus and three monthly credit score updates (instead of one, for the free version).
This can be very useful and it is a great tool that you can use especially if you have used Credit Sesame for other services and trust them. Just like Credit Karma all of these offers can be ignored and you can continue to use the service for free for life.
What services do each offer and how do they calculate your score?
Firstly, Credit Karma. Credit Karma offers TransUnion and Equifax credit scores (2 of the 3 big bureaus). These get constantly and continually updated to give you the most up to date stats on your credit score and are displayed in easy to read graphs. You also have the option to compare your credit score to the national average. Another great service that Credit Karma offers is getting your TransUnion auto score and Home insurance score, if you have a good score this makes it much easier to take out an insurance policy and can convince your insurance company to give you cheaper rates and in some cases may be the deciding factor of whether you actually get the policy or not.
Credit Sesame offers some services that Credit Karma does not, for example, Credit Sesame offers the ability to set goals and targets to work towards, these goals are very flexible and offer advice and tips on how to reach them and improve your credit score.
Credit Sesame offers a score from TransUnion, which is called a Vantage 3.0 score, designed by the three credit bureaus as an alternative to other commercially used scores such as FICO.
One great feature that they do offer which I think is great is free identity theft coverage up to $50,000 which is a great idea and has been a massive success with its customers, however the lack of Equifax and Transunion scores is a bit of a deal breaker.
Overall which one is better?
All in all both are great utilities for checking your credit score with both being completely free and giving a pretty accurate score. The biggest difference is the way scores are calculated between the two. For exmaple the Vantage 3.0 score that Credit Sesame uses is an alternative to the standard FICO score however it’s still widely used by lenders and financial institutions. Credit Karma on the other hand offers both Equifax and TransUnion scores which are two of the three large credit bureaus and also used throughout the industry as standard options. Honestly it’s probably best to create an account with both but if you are hard pressed to choose only one I feel the extra features that Credit Karma offer such as automobile and house scores really push it ahead in this comparison and overall give it the victory over Credit Sesame.