If you're preparing to get a loan, perhaps a mortgage, it's a good idea to check your credit score. To save yourself from the damage that can happen when you fall victim to identity theft, monitoring your credit is also advisable. Two of the more popular ways to access the information credit bureaus have on you is through Credit Karma and Credit Sesame—but which is best?
Related: How Credit Scores Impact Your Interest Rate
Here, we take a look at some of the differences between the services so you can decide which is better for you:
The Main Differences: Credit Karma vs. Credit Sesame
Credit Karma and Credit Sesame provide similar offerings to consumers, but they do have some important differences. For one, Credit Karma has been around for longer and has more subscribers. They have more than 100 million accounts and started business in 2007. Credit Sesame was founded in 2010 and has around 9 million customer accounts. They also provide personalized advice, as well as savings and loan offers.
They both provide free access to credit scores, allowing customers to work on improving their credit scores to get the best interest rate and have a better chance of getting the loan they want. They'll need some information from you when you sign up so that they know they are giving you the correct number. They use security measures to make sure your data is kept safe.
Credit Sesame offers paid options to monitor your credit, while Credit Karma is a free service that uses ads to fund the service. You'll receive targeted ads when using Credit Karma's site or app based on the information you submitted. Should you sign up for those advertised offers, Credit Karma will profit. They also provide more free services than Credit Sesame. Let's compare:
Credit Karma Features
- Credit scores/reports from Equifax and TransUnion
- Credit monitoring
- ID monitoring
- Alerts to changes to your file
- Help with taxes
- Free tax filing
- Auto Hub: Information on current recalls, insurance rates and your car's estimated value
- Search for unclaimed money
Credit Sesame Features
- Credit scores from TransUnion
- Credit monitoring
- ID theft protection
- $50,000 of insurance coverage
Credit Sesame Paid Services
Beyond the free account, Credit Sesame offers three tiered options. Their Advanced package ($9.95 per month) shows your credit score and reports from all three main bureaus, along with daily updates from one. The Pro Credit package adds credit monitoring with all three bureaus and expert support for $15.95 per month.
For $19.95, you can get their Platinum Protection, which monitors your Social Security number and your information in public records and black-market websites. There is also 24/7 support for lost or stolen wallets.
Additional Services From Credit Karma
While they both use VantageScore, Credit Karma gives you the score for Equifax and TransUnion. It also has the advantage of giving you full access to your credit reports from both bureaus and updates more frequently than Credit Sesame.
Other services from Credit Karma, like Auto Hub and tax filing help, could be beneficial to many. They also give you the chance to sign up for a high-yield savings account through MVB Bank; the accounts are covered by the Federal Deposit Insurance Corporation. You could benefit from an interest rate that is 18 times higher than the average savings accounts.
The Importance of an Excellent Credit Score
When buying a home, there are few things that are more important than your credit history. Sites like Credit Karma and Credit Sesame allow you to monitor and build your credit. They are great for folks that like to see a complete history in black and white. By using the site over an extended period of time, you can feel confident in building your credit history. Getting your financial house in order will be far easier.
Ask any buyer's real estate agent or mortgage broker, and they will tell you that before you put down a house deposit, it's vital to get your credit score as high as possible. Squirreling away as much money as possible is always going to be a prerequisite to buying a home as well. By doing so, you open yourself up to far more mortgage options.
Can you buy a home with bad credit? Sure, but why would you want to when it will cost you a significant amount of money? By starting to work on your credit early, you'll put yourself in a much better long-term financial position.
Final Thoughts
Similar services are offered by both organizations. They also both have apps that make monitoring your credit very straightforward and allow you to stay on top of any changes to your credit reports.
Credit Karma uses the data you provide for its targeted advertising. If you don't like the sound of this, Credit Sesame will be a better option. It might be a good idea to sign up with them anyway since they offer $50,000 worth of identity theft coverage for free.
Credit Karma has more to offer if you're fine with the way they fund the service they give to you. But since the services are free, you could sign up for both and see which you prefer. The bottom line is to be vigilant with improving your credit. There are only good things that will come from doing so.
Bill Gassett is a nationally recognized real estate leader who has been helping people buy and sell MetroWest Massachusetts real estate for the past 33 years. He has been one of the top RE/MAX REALTORS® in New England for the past decade. In 2018, he was the No. 1 RE/MAX real estate agent in Massachusetts.
