This is the first time the company has allowed those without a credit score to join, and it opens access to Credit Karma tools for 17 million American adults who either have no credit file or have a credit file with too little history to generate a credit score, Credit Karma said in a Thursday (May 7) press release.
“As these members begin building their financial identity, Credit Karma will serve as both the starting point and foundation for their journey,” the company said in the release. “We’ll help them achieve their first score while building financial literacy and equipping them with the tools to manage and grow their money, access better financial products and make financial progress year-round.”
The resources Credit Karma offers these members include Credit Spark, which turns existing on-time payments for things like utilities and phone bills into credit history; Credit Builder, which enables members to build both credit and savings by making consistent payments into a locked savings account; and secured cards, which allow members to access credit and build a credit history.
Credit Karma also offers educational guides, educational trivia interactive tools, simulations and calculators that help members understand how to improve their credit, manage their money and plan for their financial future.
“As members build credit, they unlock access to a wider set of opportunities, including everything from personalized credit card recommendations and reward optimization to auto insurance savings and seamless tax filing powered by TurboTax,” the company said in the release.
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The PYMNTS Intelligence report “Secured Credit Solutions: Assessing Credit Accessibility for Disenfranchised Consumers” found that many credit outsiders experience financial strains, with unforeseen expenses being the top financial challenge, and even essential expenses being a challenge for some of these consumers.
Another PYMNTS Intelligence report, “How Credit Insecurity is Changing U.S. Consumers’ Borrowing Habits,” found that few consumers know how to improve their credit scores and qualify for credit products. A better understanding of how credit works can enable credit-insecure consumers to access safer tools to cope with financial strain, the report said.
