I’m Ken Lin, Founder and CEO of Credit Karma. I’d like to help everyone improve their finances in the New Year. AMA

is it really free? what's the catch?

It really are free. We make money in different way from most.

When we pull credit, we are able to determine how much you are currently paying for your loans. When we see an opportunity for you to save money, we will point it out. If you take advantage of that opportunity, we should make money, you should save money, and the bank should get a new customer. The loser in the equation was that bank that was charging too much. The most important part is that you are under no obligation to click or use any of the offers. Many users don't. And I suspect many of you have ad-block. That is okay. We are as mission driven around education and access as we are a for-profit business.

Disclosure: I copied this from an older AMA cause younger me was more eloquent than older me.

You will also get spammed in the mail with credit card offers. I received 2-3 per day until I opted out which wasn't an easy process.

That mail spam has nothing to do with us. Your data is available via the credit bureaus way before we existed. Financial service direct mail is a $3B a year industry.

With that said, if you don't want mail solicitations just opt out. Here is the link https://www.optoutprescreen.com/?rf=t

Thank you! I've been using credit karma to monitor my credit score. I had a bankruptcy almost 3 years ago. I want to get a mortgage soon and my credit score is about 640. I have a few credit cards with small balances. What can I do to raise my credit score and help get a mortgage?

Sounds like you are already on your way. Just keep doing what you are doing. Having 3-5 credit cards that don't carry a balance and are never late is the easiest way to build a 700+ credit score.

Before you apply for any mortgage you should talk to a loan consultant. Many lenders have a BK screen regardless of score. For example some lenders may not lender to you if you had a BK within the last 5 years. Otherwise sounds like you have it together.

How did your business get rolling? In other words, was it pure luck? Or are there strategies?

It really took about four years for us to get traction. So I would say persistence more than luck. The strategy was build the best service that we could for consumers and the rest would follow. After four years, we had a great base of users who loved the service and told their friends.

I got a serious delinquency charge off account, paid it off over a year ago, is there a way to remove it within less than 7 years?. Can I improve this?.

There isn't much you can do about it now assuming it is accurate. Although it will stay on your credit for several year, the impact diminish with time in virtually all underwriting models and credit scores.

Rather than focus on the blemish, I suggest building good credit habits to eclipse the poor ones. Get a couple of credit cards, use them sparingly, always pay on time, never carry a balance.

I've got good credit. No negative marks.

But my score is stagnant at mid 700's. According to your app, I need 21 lines of credit for it to be ideal. I have 12 ish and don't want to open more.

Why is having 21 lines of credit helpful? That number seems irresponsibly high for an individual.

So breadth of credit is really what the 21 implies. We simply are showing the correlation of people with really high scores.

The idea with breadth is that if you can manage a mortgage, an auto loan, and several credit cards, you can probably handle one more. 21 is not a magical number but more of a representation of the idea that if you have handled lots of accounts in the past and paid them off, you will be able to do so in the future.

Hi Ken, are there any plans to have all three credit bureau scores & reports on Credit Karma? If so how soon?

No plans right now but we are constantly evaluating new features.

How do you set yourself apart from other companies? I work in finance, and deal with credit counseling as part of my job. I honestly just assume all of you guys are a bit of a scam (no offense intended). As a result, I always just refer my clients to annualcreditreport.com, because it's been the 100% trustworthy site for me.

No offense taken. I know exactly where you are coming from. If you haven't heard about us, you should be cynical. I always thought that a reputation and trust is something that you build overtime. We do a lot of things differently, I'll try to enumerate:

• We have never ever charged a single person for our service.
• We don't sell member data. We hate spam too.
• We try to build products that help people.
• We have been upfront about our business model and revenue stream.

If I'm disputing a medical bill is there some way to suspend and delay credit penalties as I try to work to a resolution? Or is it just going to run its normal course and hurt me as soon as it goes to collections?

In other words, is there a way to tell the credit score genies "hang on, this is an unfair and incorrect bill but I need time and a lawyer to figure it out."?

Thanks.

There is no procedural way that I know about unless it is inaccurate.

With that said, have you tried to speaking to the medical provider? They may work out a payment plan with your that doesn't involve going through a collections company which will hurt your credit.

If we all go and sign up right now will we crash your site?

I hope not. We see more than a million users a day.

[deleted]

We buy our data directly from two of the major credit agencies, Equifax and TransUnion with no changes or adjustment from us.

The scores can different for a number of reasons: the time of the report, the credit score model used, or bureaus used. It is hard to control for all of the factors.

Do you sell the info of people who use your site? In other words, am I going to get a bunch of junk email if I try it?

Definitely not. We hate that model too. We do just fine by showing you offers that we believe will save you money. We think that is a win win.

As a test, I always suggest people create a unique email account just for us. See if you get any spam in that account. All bets are off if you use a crappy email provider ;)

Ken Do you plan on making credit karma a premium service?, Like offering premium features such as adding FICO, daily updates, 3 credit score bureaus etc?. Is that on your timeline?.

We plan on making the service better and better over time. It was just one year ago that we added Equifax. Two years ago since we added full credit reports. Things don't happen as fast as we want but we are working on many new features.

As for premium, we never plan on charging our members. We think everyone should have the same level of access to their financial data regardless of ability to pay.

Hi Ken, Thanks for such a kick-tail site.

When will yall get Experian on board?

Also, how are the scores that are shown actually updated? I.e. if I pull today, and then next week, do the scores next week actually reflect any changes made at the bureaus?
Thanks again for such an awesome site. It really helps!

The score are real time. They are pull from the bureau when you log on. As for Experian, we don't know it hasn't been a focus at this point.

Stopping in to say I'm a big fan. Really helped me raise my score by actually understanding what's going on. What are some things I can expect in the future from the site?

Thanks for being a fan. We are working on the following high level projects.

• Better mobile app
• Simple interface
• More powerful notifications and credit monitoring

Do you regularly test your products? I've seen a heck of a lot of very useful and wonderful financial services that are available online, but their interface makes it hard to use, to the point that it's hard to describe to support what went wrong. What would you suggest that your customers do when they need support so that they get get help Quickly?

I try to go through the site at least twice a month. Financial service are complicated and making them simple from a UX perspective is exceedingly difficult.

For support, we staffed up in 2016. Last week, our response time was less than 5 business hours. If you have a problem, email [email protected]

Thanks for doing the AMA. What's the easiest way to improve your credit score quickly?

If you have really poor credit (600 or less):

• Get any accounts in default current. You don't have to pay it in full but you have to get it back to monthly payments
• Pay all your bills on time moving forward.
• Open a secured credit card with the explicit intention of not using it more than once or twice a month and paying it off in full. I say this because many of your open accounts will probably close once you pay the debt down

If you have a fair score (600-700):

• Don't spend more than 30% of your credit card limits at any given point. If you do, consider getting a higher credit limit.
• Look for errors, it is estimated that 1 in 4 consumers have an error on their credit report.
• Strive for 3 to 5 credit cards that have no annual fees. Never buy more than you can afford, never carry a balance, and always pay on time. If you do this your score should be north of 700 in 6-12 months.

Are there any good "starter" rewards cards in the 700 to 710 range? I currently have a secured card (which they raised the limit due to me paying in full on time) as my one and only.

I have been getting a ton of offers from Discover for an IT card.

If you are getting offers in the mail from Discover, it probably means you are pre-qualifed or pre-screened meaning you have an above average chance of being approved. Discover is a good product, respond to one of the offers if you need a longer or more robust credit profile.

This is self-serving but you can go also to our best credit cards to get some other ideas. Technologically if you are a member, our data science team tries to match offers based on your credit report and the bank's credit requirements. That is how they approval badges were developed. Use the badges if you are worried about getting declined.

Is there a difference between being pre-qualified, pre-screened or pre-approved?

What's the best way to get these offers? I've been looking to get the 100,000 point sign-up offer for AmEx Platinum.

They all have differing threshold of approval requirements required by law. Pre-approved is highest threshold.

As a bit more context, people are often rightly annoyed when they are pre-approved and then declined. The reason is two fold.

• There are some assumptions made about your income and other factors before your were pre-approved. If these don't meet the assumption when you apply you might be declined
• Direct mail pre-approvals are often done 8-10 weeks before the lender receives your application back, if your credit is materially different in that window, you may be declined.

First off I love the app. I have used it to help my credit and made things better for myself.

I applied for (and got) a credit card and it was really easy. Currently I am trying to buy a house, has there ever been a discussion about adding a mortgage finder to the system?

We talk about it all the time. The thing we don't like is that mortgages tend to be so complicated and offline that we aren't sure that we could provide far superior experience.

How hard was it to get your company running?

Well no one want to sell us data, the economy was on the verge of collapse (2008), and every consumer was jaded by all the other free credits score sites. Definitely challenging but that is the fun. If it was easy everyone would have done it already.

Dear Mr Lin I am a 23 year old student and i have tried over the years to save some money up from occasional jobs i used to do, how would you recommend me to start investing ? Which are the best ways for investing and growing small amounts of money (10 000 or less) ? Happy new Year

I'm better on the debt side but long term investing is all about diversifying your risk and lower the fees which can have a big impact on your returns. As such start with some low fee ETFs which are simply index funds that track to the market.

Actual user, big fan. I first heard about you from the show On the Spot, so my question is have you ever watched the show? What do you think about being a sponsor to online series?

Interesting. I have never seen the show before.

Can you explain some of the terrible actors in the commercials? Clearly you have the budget for a real production but some of the acting is worse than high school shows. I like the service though.

Haha. Well some of the actors are employees others are not. We try lots of things some work others don't. Hard to make a commercial that is universally liked while still motivating you to action.

why does simply checking my credit make the score go down?

It doesn't. this is a very common misconceptions. Checking your score for a credit application is a hard inquiry and makes your score go down. Checking your score for your own use is known as a soft inquiry and does not affect your score.

Because both are called inquires many people assume both lower your score.

What are your thoughts on people like the folks in /r/churning who constantly sign up for credit cards to take advantage of the bonus miles/points offers? Would something like this destroy your credit rating?

If I wanted to start doing that, for someone like myself who owns my own home and not looking for any loans any time in the near future, does it really make a difference what my credit score is?

If you do it right, it won't destroy your credit. In many ways, credit is supposed to help you get better deals.

I think the guys in churning are doing it to the extreme. I do a simpler version of it. Every couple of years, I'll find a new card that has a nice perk of bonus.

How do you encourage young people to start keeping track of their finances and managing their budget accordingly?

Awareness is the first step. You can't care about something like credit or savings until you know it matters. Once you have it established, the key is making the process simple and nearly automatic. Our goals is to take all the friction out of finances. Easy forms, simple comparisons, and digestible tips.

Hello Ken, Thanks for the AMA.

I've looked over your career path on LinkedIn. I'm interested specifically about your transition from employee to entrepreneur.

What do you believe were your two most influential actions that built the foundation for being the CEO of CreditKarma?

What are two actions you would recommend for someone who is young, has already had "employee" success, and is interested in expanding to a business owner?

I always have been a tinkerer. I like intellectual problems especially in the business world. I believe intellectual curiosity is key. Secondly, persistence and conviction are the other main drivers. If you fit that profile, you can make that leap. Entrepreneurship is hard. That is why so many business fail. But even in that case if you are learning at each opportunity you will eventually succeed.

I had a bankruptcy that finalized over 8 years ago. Since then, I've bought a house and 3 car loans. I have a great paying job that I've had for 2 years. For the life of me I cannot get a credit card to help build up my score. I have a secured card from my bank though. What else can I do to get a small limit cc?

What is your score? And want is your debt to income?

673 transunion and 667 Equifax. Credit report DTI is 30%

That all sounds like it is inline. I would suggest Capital One Platinum or Discover based cards at that score range.

We have approval badges on Credit Karma that take your credit and the lender's requirements into account, have you looked at that?

I have not tried it through your site, but I have tried it from both of them with declines. Discover said past bankruptcy and cap one because they were included in the bankruptcy.

So the BK filters are really hurting you. Depending on the type of BK it should only affect your credit for 7 or 10 years. Sounds like you may be coming to that period.

I was just very surprised that I could get a house at great rate 3.19 and 3.49 car loans, but no credit card.

Candidly, I am too. I guess the different is that other loans are secured with collateral.

Where did you get the inspiration to open this business from?

I like solving problems. With Credit Karma, I saw a need for consumers to have access to something very fundamental and I knew that banks pay big dollar for new customers. Make those two thing was a great mental challenge.

I'm looking into getting a new card, however, I was told that longevity with a company looks better for any future endeavors (like buying a house or car), is that true? Also, are credit cards with airlines horrible or a safe bet? I am planning to travel a few times this year, and plan to leave the country at least once a year. I currently have a credit card with my bank, but it's been my only card for about three years?

If you only have one card now, you definitely want a card that you can have for 5-10 year. In that situation, go with card with no annual fees. Interest rates don't matter as long as you don't carry a balance. Airline cards are fine but many require an annual fee. Make sure that you will recover the annual fee back in perks such as miles or cash back.

I'm taking a personal finance course this semester in college. Any advice to someone who will be entering the real world before long?

Never spend more than you can afford. Pay all your bills on time. Have a rainy day fund. Those are the basis.

Hello Ken! So, just an ordinary 21 year old here, but I need some credit advice. I want to build my credit, as at the moment I have no credit. (Just starting out with a good, stable job and such.) What would be a good way to do this? I'm not looking to buy anything big like a car or what not, but I'm just curious if there's any small things to do to get the ball rolling.

Try the Capital One Journey card for starters. They target people new to credit. The safer option is a secured credit card but I hate to recommend a card with an annual fee if you don't need one.

Ken, the calendar on Credit Karma that listed each bank's balance reporting dates was super helpful, can you bring that back?

Also, my wife has only two dates on her CK account, years apart. Does the data not update if you don't login to CK?

The last report date is still on the credit report. It is a bit hidden. You have to expand the section.

Hi ken. Ever thought of making Credit Karma available to other countries?

We have but here are so many thing that we want to do in the US first.

I am 26 years old and have no credit history. Everytime I try to apply for something so I can start building credit (like a credit card or a loan) they deny me because I have no credit. What should I do?

Try a secured credit card. These cards require a security deposit. They also require that you pay each month or it hurts you credit so it is not like a pre-paid card. The upside is that on a credit report it looks like a normal credit card which build credit.

Secured cards usually have a annual fee and high interest so don't carry a balance. With that said, it is a good way to start building credit.

Can you suggest any offhand? And do secured credit cards work best for individuals, or would a joint card work just as well for a married couple?

Capital One has a good secure credit card.

I don't know if you can have a joint user on this card so it is unclear whether this will be good for a couple.

Hi Ken, thanks for this Iama. I have been getting serious about building and fixing credit and your app has been instrumental in the progress I've made so far. Without getting too in depth in my situation I am hoping you can give me some input as I've not found much anywhere else.

I've raised my score from 570 to 640 since July. I have one collection account (cc) and three missed payments on another account (cc) from 18 months ago. While paying my balances down on my 2 three year old secured cards to under 2% and opening 9 new lines of credit (total 11 cc, 1 car payment, and 18k in student loans) helped boost me quickly to ~630, it seems like it's stagnated the last 3 months or so. Are those deliquent accounts going to keep me in the barely credit worthy range until they are taken off in 7 years? Are there "benchmarks" that lessen the impact like 2 years since, 3 years, etc?

The old delinquents are fine. 1) there is nothing you can do about it. 2) The impact diminishes over time.

I suspect the big deterrent on your score now is the number or recent inquires for those new accounts. I suspect will start moving up once the inquires fall off which is technically two years but I think within 12 months the score will move up assuming your utilization is low and you make all payments on time.

What are your opinions on the debt settlement industry? Would you ever partner or advertise one?

For a long time, the industry was shady shady shady. Most of those have gone away with action from the regulators. The ones that are around are much better but in this space I would definitely look for reviews and feedback about any company.

How did you come up with the Credit Karma business model? And did the concept come from good or bad credit experiences?

The business model was just an attempt to solve a few problems simultaneously.

• People deserve to get access to their own credit score given how important it was.
• Companies shouldn't trick people into monitoring products
• Banks spend billions a year marketing for new customers.

They concept was from good experiences in that I figured that a good player in the space would stand out in the crowd.

That's a great simple model to start. What aspect of your business are you looking to improve on? Are there new services or options in the horizon?

At the highest level, so much money is spent on helping big banks make more money. We have an idea about adding features to help you save money.

For example, your interest goes up when your score decreases. But no one tells your your interest should go down when your score rises. We are hoping to build those feature.

Embarrassing stories? It's nice to personify someone people don't often think of.

This answer would be pages long and I'd prefer not to relive the experiences. Generally speaking, only the successes get retold but the reality is entrepreneurship has a disproportionate rate of failures to success. Embraces the failures and learn from them.

Isn't it a catch 22 of sorts to suggest that additional lines of credit will improve your score when credit inquiries actually harm your score?

Yes. They clarifying statement is over time. If you applied for 22 credit accounts in one day, your score is going to suffer. Because who wants to lend to someone who is looking to borrow from everyone. On the other hand, if this is over 10-15 years, you are probably quite responsible.

What would be nice is a way to submit a challenge a charge right through the Credit Karma website. Kind of like who Annual Credit Report can do. I Am sorry I forget the name of what it is.. but you challenge the charge right through the site and it sometimes gets removed. What are the chances of getting that added?

I think you are thinking of disputes and it is part of our service now :)

http://www.forbes.com/sites/laurashin/2015/11/12/see-an-error-on-your-credit-report-credit-karma-now-makes-it-easy-to-dispute/

Any idea why it isn't clickable? http://i.imgur.com/BLVlJIg.png

I don't know. I'll ask the product team tomorrow. I see the same experience.

We both made the same mistake. The link to dispute is below the direct dispute text.

I agree with you that the text looks like a link so the product team will address that in the future.

Hi Ken, got a weird offer when I logged in to check how things were going. I think this could be pretty misleading if similar offers are sent to other users.

Congratulations! We found $1,332 of monthly savings over one year.

Basically higher interest rate over a longer loan. Saving money annually but paying more in the long run.

How We Calculated Your Savings: With this loan it is estimated that you will pay $111 less per month than you would with your current loan. This would amount to $1,332 back into your pocket over a period of 12 months. Over the expected life of this loan, it is estimated that you will pay $-409 less in total loan costs than you would with your current loan.

I understand it is automated, but maybe there should be a warning when the total savings comes out negative?

It is a tough balance some people really care about cash flow other's care about total interest paid. By putting the negative we hope to illustrate both points.

Seems like it is still not perfectly clear so we are going to keep working on it.

Thank you.

Are you operating solely in the US?

Today, it is US only.

Any plans to expand in the near future?

I burned myself last year by saying Canada and it didn't happen. So I'll stay quiet until we launch in a new geography.

What was your job prior to starting this company? I'm in school for finance now, undecided of what I want to do

I was mostly an analyst in all of my prior roles. In the position, you get to see a great many aspect of various businesses. I think it is a great way to learn about all facets of a business or industry as you are working through empirical data.

How similar is that to venture capitalism? I'm looking to go down either analyst road or venture capitalism

An associate at a VC firm is essentially an analyst. So no divergent at all. In the VC world you will get lots of breadth but not as much depth. Either experiences are good IMHO.

Many cards. High balances. High interest. I'm able to pay $800 every two weeks, because my husband has suspended his IRA contributions. What is the quickest approach to get the cards paid down to 20% of available credit? Many thanks.

Try a consolidation loan. If you have a good score consider Prosper or Lending Club. If you have a lower score try Avant Credit.

I've been using credit karma for a few months now and it is fantastic! Thank you! I've actually improved my score by over 100 points in that short time!

How often do credit card balances update?

Most banks report once per month. They generally report on the same day so that reporting date will usually not be the same as your cycle date.

I apparently mis-entered one of my id validation questions (though I'm pretty confident I didn't). Do I seriously have to photocopy PII documents and send them through the US mail service? This doesn't feel any more secure than just emailing the documents to your company directly. Plus I haven't owned envelopes or stamps in years...

I actually don't know our protocol around that these days. It's been many iterations I was involved. Did you ask support if a digital form is okay?

No, the site didn't give me the option of contacting support. Just told me what I needed to mail to your PO Box. I'll try to find the contact info for support, thanks!

[email protected]. That I do know.

What do you think has been the most helpful, defining, or just basically significant moment Since Creditkarma's inception for you?

Over the years that there are very few defining moments. Rather they tend to be small wins that compound.

For example, we thought that a big partnership or a write up in a big paper would change our trajectory. They never did.

What really mattered was getting our registration better by 5% each month or getting 2 more partners on the marketplace so there was more for consumer business.

Hi Ken,

What's the most common mistake people make when planning their finances? And what's the easiest ways to avoid them?

Most people just ignore the problem until it is too late. For example people don't care about their credit until they need a mortgage. Or other, don't think about a rainy day until they get laid off.

I think it really just takes one hour a month. Go /r/personalfinance and read some of those articles and invest one hour a month in your financial future.

Thank you for the IAmA. I love the site and my wife and I both have been signed up for a while and seen the various changes. Just a couple questions.

1.) There are three major trackers yet only two on the site, any particular reason or are the two listed the ones that are focused on in general?

2.) Why is there such a major difference between the two scores, just generally different formula used by each company or do some things only report to certain companies?

3.) My wife and I just went through a Bankruptcy (coming up on the 1st year anniversary of the discharge in a few months) any tips on easy and small ways to build credit? Was told a secured credit card but was declined for one.

1) The short answer is that it takes time to work out the relationship and the cost structures. We only added the second bureau one year ago. 2) There should not be a major difference between the two bureaus. For example, my scores only differs by a couple of people between TransUnion and Equifax. If the score is differs by more than 20 points, there is usually a meaning difference in the reporting data. 3) The secure card is the way to go. Try again after one year. Many lenders have filters the recency of BK before they will approve you.

1) The short answer is that it takes time to work out the relationship and the cost structures. We only added the second bureau one year ago. 2) There should not be a major difference between the two bureaus. For example, my scores only differs by a couple of people between TransUnion and Equifax. If the score is differs by more than 20 points, there is usually a meaning difference in the reporting data. 3) The secure card is the way to go. Try again after one year. Many lenders have filters the recency of BK before they will approve you.

Makes sense actually, it has been a little bit so we might try for the card again a little bit after the 1 year mark.

As for the difference it isnt huge but I think mine and my wifes have a difference of 10-15 between the two (individually not comparing hers to mine obviously)

Again thank you so much for the wonderful site, I was skeptical at first but I love it.

Oh, any chance of ones FICO score being added as a feature eventually?

There is always a chance but with a finite set of resources we have to weight the benefit with the costs. Most companies are moving away from just a a score. They use all the credit data now and are moving way from just a score.

I honestly hate the commercials, they just seem so cheesy. Are there any plans to change them to make them better?

They aren't for everyone. The reddit crowd has certainly conveyed their displeasure at our creatives. We are working on new ones and you should be seeing them this month.

Just to give you another perspective, I despise your commercials... but that hatred made your name stick in my head and I ended up becoming a loyal member (2 credit cards from your recommendations) because I thought "I need to fix my credit, what was that place with the stupid commercials?"

It worked!

Can you wipe out everyone's debt?

We don't make the credit score or report. We just buy it from the bureaus and make it free.

Do you have any other business ventures? If no, then is there a business that you would like to be a part of in the future?

Credit Karma keeps me pretty busy. Moreoever, I often get to build that ideas that I like.

Why should I care about my credit score?

It affects your insurance rate, your ability to rent, the rate at which you borrow money and sometimes employment. If all of those things are unnecessary, you candidly don't need to care.

With that said, I think we are much more than your score. For example we also monitor your credit which can help guard against identity theft.

It appears that the credit Karma concept assumes that business are correct more often than consumers. When my claim is rejected by my insurance company, the system is set up to make me afraid of them ruining my credit and run to pay the bill anyway. Sometimes the company does not deserve to get paid, and I don't have time or resources to fight over a $100 disputed charge. What does Credit Karma do to help me fight an incompetent, large, bureaucratic, dishonest organization?

This is a loaded question. I'd defer to the fact that you should dispute anything on your credit report that is inaccurate. We built a tool called Direct Dispute that simplifies the process into a few clicks.