I'm Kenneth Lin, founder and CEO of Credit Karma. Yesterday we announced our truly free tax prep and filing service. AMA!

Is 2-factor authentication something that is on your agenda for Credit Karma? I love the site and would like to see that feature added for an extra layer of protection, especially now that you will be offering a tax option.

Yes two-factor is on our roadmap. We have a number of new security features at launch including SMS verification.

NIST recently released a draft version of authentication guidelines and in it they stated that SMS-base 2FA should be banned for security concerns.

They cited that its not securely encrypted, is Credit Karma taking this into account?

We have a dedicated team on security. I suspect they are ahead of your note. This is why I distinguished 2FA from SMS verification. We have a layered approach on security and security is our top priority.

I won't say any more on it as not letting the bad guys know what we do is part of that security.

Can I make a point about this?

It's great seeing you recognize the security team. This may or may not already be the case for your organization, but can you give further power to the security team by having your CISO report directly to you and giving your CISO solid budgetary support? Finance might look at this and say it's not justified, but frankly, when founders/CEOs give security this kind of support within the org, security becomes less of a calculated cost avoidance measure and more of a marketable asset for the company.

Background: I do security things.

Two things:

1) We have basically an unlimited budget for security.

2) We are hiring.

I realize you are offering a free service so you may not offer these features but I have to ask:

1. Will you provide any kind of guarantees? Often tax filing software will provide accuracy guarantees so that any fees or interest incurred due to filing errors will be reimbursed by the preparers.

2. Any kind of audit support?

And also:

1. How do you envision this generating income for you? You’ve said before you don’t like when companies sell people’s data so you don’t do that but any general ways you will profit? It would be upsetting if the classic saying, “if it’s free you’re the product” were true here.

2. One nice thing about the credit scores on credit karma is they not only provide your score but explain a little more behind it. What it means, what factors go into it, etc. This has really helped educate a lot of people (myself included) what credit scores are and some of the logic behind them. Will your tax software be the same? Will it explain how the tax brackets are broken down? Or what the difference is between capital gains vs normal income and how it’s taxed. I know in the US we constantly argue about tax policy and it seems like educating more people about how taxes work would be beneficial regardless of party affiliation. I guess I'm curous how much of an educational bend you've added?

Most of the guarantees that we see in the space are the refunding of the cost of the software. If we follow that model, we would be refunding you $0 as part of our guarantee. In your question, you are implying quality. We are not going into this net new. We bought a company that has been providing taxes for 10 year and is white label provider for one of the major tax preparers online. As part of providing the service, we have to go through IRS and state certifications. Finally, I suggest you try our service against another major provider. You should get the same results. At that point, it is up to you whether you want to pay on that other provider or file with us for free.

As for audit support, we are still working through our features. We don't know if the audit supports that others market is valuable. We want to understand that aspect fully before we engage. With that said, we will have a full team of certified tax professionals who can help answer questions about our service (email, chat, phone). All for free, no upsells

I spoken about how we plan on using the data in another thread.

Edit: changed CPA to certified tax professionals but we have both.

Ok thanks for your reply! I didn't mean to criticize your quality I'm definitely pleased with your credit score service and I had heard about your acquisition. More of a question about the guarantees I see on other tax software. Wondered if you'd provide the same.

What about my education question?

Don't worry, I wasn't offended:). Just trying to read between the lines. Regarding education, we won't have that level of content this year. It will much more about a simple and clean experience. We will incorporate more of the education into the product in future year. But I'm not sure that it would be as detailed as credit since tax code may change a lot whereas credit has been pretty steady.

Also thank you for being a member!

What is your credit score?

It was about 810. I recently missed the first payment for the first time in my life and it dropped to 765. :(

God damn it Kenneth. Get your shit together.

Mom! I'm 41. Stop stalking me on reddit.

I am curious as to why Credit Karma focuses on the less used, and seemingly less valuable, Vantage model. Is it a cheaper resource as you won't have to pay for the FICO models or are you and your company seeing a trend away from those FICO models?

Great tool btw. I recommend your site for anyone trying to understand and dive into their credit profile.

There are a few reason for this. One is that FICO is expensive and scores are a commodity. FICO also sells about three dozen variants. Which means even if we used them, the chance that the score you see on the site is the same as the one the lender uses is low.

Secondarily, the trend is to move away from credit scores in underwriting. Scores were great when banks didn't have statisticians or large data processing capabilities 1980-1990s. Today, everyone embraces big data. That means banks can compute their own risk score from the credit report. The score computed by FICO or Vantage becomes a smaller variable in the approval process.

I should also say scores still do matter for small banks which don't have the resources. Scores are also good for describing general risk. For example, you might describe the average score of your portfolio of loans to signal the relative risk.

Why should I choose you over your competition, such as TurboTax and my own personal bank (in terms of notifying me of a credit report/score?)

In tax, I think TurboTax is a good product. Today, the main difference will be price. Our service is free no matter what schedules, income, states that you need. In the future, we think that integration on our platform will make the experience more seamless. For example, we will know that you bought a home from the credit report and double check to make sure that you are getting your mortgage interest deduction.

As for credit, we have the most robust platform. We have two bureaus, credit reports, credit monitoring, direct dispute, credit simulator, etc. With that said, we are always happy when banks give away the data. Better informed consumers lead to better outcomes.

Why are the commercials so cheezy?

lol. They are memorable and are slightly quirky. We like that and most of our users like that. But we understand it is impossible to get a creative that everyone loves.

What do you plan on doing with the data collected from these? Also, would your free tax form be as simple as something such as turbo tax?

I should be clear that we aren't going to be selling the information like some people suggest. First, I think saving people $50-$100 a year is a pretty powerful reason.

The business reason are that we will be able provide better advise and recommendations. Let me give you two examples.

• Credit data makes up 80% of an approval decision. Income and ability to pay is probably 10%. Some members get upset because they are declined for an offer. Well they are often declined because they have to income. By providing the tax service, we can see your income which helps better inform the approval odds.
• Mortgage are the biggest purchase for most consumers. By understanding your deductions for mortgages, we will know if there are lower rates available. BTW we will also be able to double check that you are getting the right deductions when we cross reference your tax and credit report.

As for the simplicity, yes we absolutely think it will be as easy as any other provider in the market. Long term, we think it can be easier by leveraging the information from reports and other sources like I referenced in the mortgage example.

First, thanks for Credit Karma. It's a great tool and I use it at least once a week.

What made you decide to launch it? How does Credit Karma generate revenue?

I put it on the top cause everyone is asking :)

Will the software allow international student to file taxes??

International students require 1040-NR which we won't support for the 2017 tax season.

You just launched in Canada, and now you've announced taxes. Are there any other things you're working on adding?

Yes, a lot. We have been working on many really cool features. Expect a couple more awesome features in Q1.

Thank you for doing an AMA. How does CreditKarma make money?

I asked the answer to the top of the AMA since it is so common

May be a more obscure question. But as a visual designer, I'd like to know a little about your design team. What size is it? Do y'all contract work out? In house design team? What are your thoughts on how a well designed site/mobile experience does for your customer base?? Cheers!

Edit: autocorrect spelling mishap

We have about 10 designers internally. As we have moved to more surfaces (desktop, iOS, Android, mobile web), it has become more and more challenging to move quickly. We usually design in house but in certain instance like our new rebrand we want different perspectives so we brought in an agency to help.

Awesome! Y'all did an awesome job with the rebrand and new experience design, love it.

Thank you. I am sure the brand, marketing, and design teams will love that feedback. I think it looks great too.

Will you be able to import 1099s like Turbotax and HRBlock? If I remember correctly, they gave you the option to select the bank/custodian, ex: if you have a Vanguard brokerage account, then Turbotax let's you login to Vanguard through prompts within the turbotax website which then pulls your 1099s and fills out all the information for you.

These are all features we have spec'ed. I don't recall which ones will launch in January. I'll ask the team when I get into the office.

I have all my credit reports frozen. Will I be able to use your tax return service?

As long as you can pass the knowledge based authentication questions, yes.

I love your website, but I ruined my credit by getting over extended, can you help me stop these constant calls from creditors.

On a side note, thanks for helping with taxes. As a small business owner it was shocking seeing I had to pay $800 tax on $8000 income in a year when companies like Yahoo, Apple, Facebook ect use off shore companies to get a refund. Do you think any of this is fair?

You should never be harassed for collections companies. These are your bill: https://www.consumer.ftc.gov/articles/0149-debt-collection.

We are a US based company and pay US based taxes. With that said, the issue you are talking about is a tax code problem. It needs to be fixed. Most people and companies don't pay more taxes than they need too. Until you fix the tax code, this will happen.

How often is my information sold to another entity?

Exactly never.

We only share information with partners with your consent. Examples: 1) If you want us to pre-fill an application. 2) If you want us pre-approve you for a loan.

First of all, LOVE this service! Started using it a year and a half ago when I was trying to get a mortgage. It really helped me to see how things I did affected my score, and I closed this past August. My question is... never mind. I saw the answer in reading TFArticle. Ok, here's a question. Are there any plans in the works to get Experian as well? Not so concerned with getting the trimerge at this point, but it would be nice to get the whole picture. Thanks!

No plans at the moment. We have a number of initiatives that we believe will drive more value to our members. Like Tax!

In case of an audit will you keep a certain number of years files backed up?

Will you support filing extensions or amending past returns?

We support both extensions and amending. We will allow you to keep yours filings as long as you want and permitted by law.

Hi Kenneth, My wife and I are having a bit of a disagreement. Our credit scores both are around 800 but hers is typically a few points below mine. She's worried that if I drop dead, she'll have no credit record. I assure her that her credit score is earned in her own right and she still qualifies for the very best rates though her score is lower than mine. Am I on the right track? Also, all of our accounts are joint and I don't even work. Why is her score lower?

You are right. If you are married and have joint accounts the credit of the main creditor shall pass on to the spouse. This is why adding someone to an account can build credit. This benefit is a derivative of Reg B. It addresses the issue that you are specifically talking about where there was a primary bread winner and in the case of divorce or death the spouse had no credit.

There is probably some minor technical issue why her score is lower. Perhaps her first card was opened one year later than yours. I wouldn't even try to solve it as score are so complicated.

Why does credit karma's score always differ from my actual FICO 8 score? I stopped using credit karma because it consistently had my credit score 30-40 points below my real credit score.

I should point out there is no such thing as your real credit score. Each person has probably 100+ scores which are all used. FICO is a company, they make about three dozens scores that the banks can pick from. Source directly from FICO. http://www.myfico.com/credit-education/credit-score-versions/

Here is a long form article that talks about all of nuance in detail. https://www.creditkarma.com/article/differentscores

Are you adding Experian report to the website?

No current plans. We are all out on tax right now with a slew of other improvements in Q1

How do you gain revenue since you provide free services?

Added to top

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Our mission statement at Credit Karma is "to make financial progress possible for everyone". Credit scores are certainly a defining metric.

Earlier this year, we realized that there were many similarities in the credit score space as the tax space:

• Something that is important to your financial life
• An industry that claims it is free but has many gotchas
• A service that could be free if we can get scale and be smart on the business model
• Fulfills the mission

Edit:added one more point

How indepth will your Tax service be (sorry if this is else where)? Which forms will be included in the first round of the tax software? I am always looking to pay less for filing my taxes, but with a W2, HSA, mortgage, etc etc the Turbotaxes of the world want a bunch of money...

We will support the following all for free.

https://help.creditkarma.com/hc/en-us/articles/217378726-Forms-supported-by-Credit-Karma-Tax

Are you familiar/a fan of "freezing" your credit as a method of preventing identity theft?

For those not familiar please look it up, it basically allows you to freeze access to new credit placed in your name, essentially preventing (not monitoring) identity theft. You "freeze" with each of the 3 credit bureaus and "thaw" when you occasion apply for credit. It's amazing but curious to hear other opinions.

I am. I think there are many ways to protect your identity. Freezing is a good one.

For the tax forms you don't support, will we be able to manually enter the relevant information into the 1040? For example if I needed to enter something on Form 1040, line 48 even though you don't support the other forms relating to that line.

The product teams' answer is: "is it depends, in some cases you need to attach the form which we cannot provide if we don’t facilitate that form."

My answer is: it sounds like a big kluge. Don't do it.

Just letting you know, I love your Android app. Thanks for the handy service.

What does it do with my personal info to be so useful and free? ;) You guys using Google's business model?

We are using Google business model. We don't sell or rent the information to anyone and we use it to help find the most useful loan or credit card for you. That simple.

You got an avenue for tax preparers to help?

We are hiring 100+ certified tax professionals here for live help. That support will be free as well. We might create a knowledge base (content/help center) but the reality is people will want to talk to live people and we will support that.

Credit karma was used to help steal my identity, how do you plan on preventing this happening to other people in the future?

I'll be a bit pedantic here and suggest your identity was already stolen by the time they got to Credit Karma. We have many fraud and security features in place and care constantly adding more. I won't add detail as to tip off the fraudsters. With that said, identity theft is a big issue in the US.

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Common question. I put it in the top cause I am not trying to dodge it.

is it really free? or is it one of those things where you spend hours only to get to the point where you get a pop up that says "now file your STATE taxes for only $29.99!"

Let me put it this way: Credit Karma does not have a merchant processing account. We can't even accept credit cards even if we wanted to. We have NEVER charged any user for our service. Tax is the same.

*Disclaimer: The company that we bought might have a merchant processing account but we are going to shutting that down.

Free for whom, with what qualifications, for how long, and under what conditions? State, federal, or both?

Free for all, with no qualifications, as long as we can see, federal and state. No hidden fees no upcharges.

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We are not associated with Mint so you will have to ask them.