- Credit tracking platform Credit Karma will offer memberships to credit invisible or “thin file” customers, a new policy from the financial wellness firm.
- In a statement, the company highlighted a number of solutions on its platform that will help these thin file customers build their credit and boost their financial literacy, including its Credit Spark and Credit Builder tools.
- Acquired by Intuit in 2020, Credit Karma won Best of Show at FinovateFall 2008. The company was founded in 2007.
Financial wellness and credit tracking platform Credit Karma has announced that it is offering memberships to the 17 million Americans who do not have a credit score. These “credit invisible” or “thin file” adults have been unable to open a Credit Karma account up until now. A newly announced reversal of this policy will now enable these individuals to sign up for an account and take advantage of Credit Karma’s tools to help them build their credit and enhance their financial literacy.
“As these members begin building their financial identity, Credit Karma will serve as both the starting point and foundation for their journey,” the company noted in a statement. “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.”
Credit Karma’s policy shift comes at a time when millions of American adults are considered “credit invisible” or “thin file.” This means they have no significant credit history and are unable to generate a valid credit score. This can prevent individuals from participating in major financial milestones, from securing a first apartment to buying a car to landing a mortgage for a new home. Credit Karma noted in its policy announcement that credit invisibility is more problematic for individuals who are just beginning their adult financial lives, reporting that nearly half (46%) of 18- to 24-year olds feel at a financial disadvantage because they do not have a credit history.
In its statement, Credit Karma highlighted three tools in particular that will be helpful for these new “thin file” members. These include Credit Spark, a free, automated solution that transforms on-time payments for existing services such as utilities and phone bills into credit history; and Credit Builder, which offers a locked savings account to help members make more consistent payments. Credit Karma also offers credit-building card options such as secured credit cards that provide credit invisibles with a safe, structured way to use credit and build a positive credit profile.
“Until now, individuals who were credit invisible couldn’t access Credit Karma’s tools and guidance to help them start building their credit,” the company added. “Today, that changes. We are proud to announce that credit invisible individuals can now create Credit Karma accounts and take their first steps towards building a credit score and achieving their financial goals.”
Founded in 2007, Credit Karma is among Finovate’s earliest alums, earning Best of Show in its FinovateFall 2008 appearance. Headquartered in Oakland, California, the company today serves more than 130 million individuals with free access to credit scores and reports from VantageScore, TransUnion, and Equifax, as well as daily monitoring, financial wellness tools, tax filing, bill tracking, and more. Credit Karma was acquired by Intuit in 2020 for approximately $7.1 billion in cash and stock, combining Intuit’s tax and financial management tools with Credit Karma’s consumer-based platform.
Photo by Ronan Furuta on Unsplash
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