Filing taxes can be a bit cumbersome, and if you are like me, you worry about making mistakes and the IRS (in the USA), and with Canada Revenue Agency (in Canada) coming after you.
When my financial advisor told me there was an option to file a free tax return, I was willing to take the plunge to complete my taxes.
After five years of getting my taxes done by a professional, I wanted to save money.
I had experience using Turbo Tax, and their software made doing your taxes easy. Turbo Tax sells the fact that you can file your federal return for free, which I suppose is true. But you also need to file your taxes for the state, and Turbo Tax DOES charge you for filing your state return. It is a sneaky method that worked on me!
So, who did my financial advisor inform me of? The FREE TAX RETURN is available from Credit Karma (in the USA).
Before we dive into the Credit Karma review, I wanted to reiterate that although I am an American, one of my best friends’s from college is a Canadian, and she also uses Credit Karma in Canada to obtain her free credit report, and do free credit monitoring. In addition, Jeff does a full review of his experience signing up with Credit Karma and using the service.
Credit Karma Review
Let’s review Credit Karma’s two services.
First, I will discuss Credit Karma’s credit monitoring services, and I will investigate how your credit score is determined.
Second, I will provide my review on Credit Karma’s tax filing services.
Credit Karma – Free Credit Monitoring Services in the USA and Canada
When I graduated from college in the USA, I used Credit Karma to monitor my credit score. I didn’t have a credit card until I graduated college; therefore, I had ZERO credit. I wanted a way to track my score while I attempted to build up my credit score. After scouring the internet for free services, I found Credit Karma.
I used the Credit Karma service for a few years to monitor my credit score and I recommend it.
Credit Karma didn’t spam me with emails, and I only heard from them when a new score was available. If you are curious, here are the six factors that affect your credit score:
The Six Factors that Impact Your Credit Karma Credit Score
- Credit Card Utilization. This means how much of your available credit are you using. If you have a $10,000 limit on your credit card and you have a $1,000 balance – you are utilizing 10% of your available credit. To improve your score, keep your credit card utilization below 30%.
- Payment history. This one is self-explanatory. Pay your bills on time. If you can’t: stop spending, create and budget, and eliminate your debt!
- Derogatory remarks. Any negative events on your credit history will affect this factory. Examples are bankruptcy, tax liens or foreclosure.
- Age of credit history. Once you reach an average of seven years of credit history across your accounts you will be good. Any less, and unfortunately it is a black eye on your credit score.
- Total accounts. This one I don’t personally like, but lenders like to see multiple firms giving you credit because it shows you proved trustworthy to them. I like to keep things simple and use one credit card…
- Credit inquiries. How often are you attempting to open a line of credit? Do this too often, and you might look desperate.
Eventually, the bank that I use started a credit monitoring service as part of the “package” I had.
So I went with the service my bank provided, and I didn’t login into my Credit Karma account until this year…..
Credit Karma Tax Return Review – USA Service
Credit Karma makes it easy to file your free tax returns in the USA. The tax return service doesn’t appear to be available in Canada, yet, but, I will provide more detail on Credit Karma Canada later in the article.
You are probably asking how Credit Karma makes money?
Credit Karma does provide recommendations for credit cards, auto loans, and general loans based on your credit performance/usage. They make a small commission on any conversions they have on their website for these loans.
I have to admit that I was a little nervous about filing my taxes again. Last year we had a baby, so I was worried that would make taxes more complicated. I was wrong. You list your dependents, and it takes care of everything else for you.
The process…
Not sure if Credit Karma will work for you? Here is a link to the list of support forms Credit Karma accepts.
To initiate the tax filing process, you fill out the information about you and your family (i.e. date of birth). Next, you input your W-2 information and jump into questions for the Federal portion of your tax return. Then, you complete the deduction section.
Next up is the State tax return section. Finally, and one thing that I like about using Credit Karma, is they provide an analysis to “double-check everything.” For me, they reviewed a write off for educational expenses – Lifetime Learning Credit versus American Opportunity credit. It is neat that the software attempts to understand more about your situation and provide extra value by looking for additional ways to help you.
Credit Karma has a dedicated support team. I didn’t need to use them because they made it so simple to file my free tax return, but I’m sure they are fantastic.
The Credit Karma Credit Report – USA
I received a note from my financial advisor and he made a good point on how to strategically pull your credit.
You are entitled to receive your credit report once a year direct from the three main reporting agencies. These reporting agencies are: TransUnion, Equifax and Experian.
The credit report you receive from Credit Karma is a pull Credit Karma does from TransUnion and Equifax. Experian gathers its own data to score your credit.
Instead of pulling your credit report once a year from the reporting agencies, you could pull your credit score three times throughout the year. Therefore, every four months you could pull from one of the reporting agencies and received an accurate pull of your credit more frequently without negatively affecting your credit score.
The Canadian Credit Karma Credit Report
This section was written by Jeff:
How Does Credit Karma Canada Work?
I signed up for Credit Karma in order to test the Canadian service. The signup took less than one minute. The system asked for some information, like my address, and social insurance number, and then asked some personal validating questions.
You can signup for Credit Karma Canada here.
Within seconds after signing up, and logging in, Credit Karma provided me with my credit score.
Credit Karma grabs the score from TransUnion, and although the score wasn’t that different from the $150 paid yearly service that I subscribe to from Equifax Canada, there was an approximate difference of 50 points between my Equifax and Credit Karma (TransUnion) score. I’m not sure how they validate these differences, because it appears that they both provide data and pull the reports from the same places. Also, it’s important to keep in mind that Equifax charges me for the report, whereas Credit Karma provided the report to me for free.
Equifax Canada does offer a credit monitoring service, which is something that I use as a form of personal credit insurance. Any time a credit report is pulled on my name, or, any changes are made to my report or history, I receive an email, I log into Equifax Canada’s website, and I can monitor the changes and reports immediately.
Frankly, I actually like the Credit Karma reporting screen better than Equifax’s screen. The layout of Equifax is old and outdated and is in desperate need of a refresh. It looks like it was designed in the late 90s.
In comparison, the Credit Karma Canada screen is easy to navigate, and the login screen provided a one-page snapshot of my entire history in one place. It showed by credit card debts, which were all accurate, mortgage information, a section for car loans, and even some other miscellaneous information like my outstanding cellular invoices.
Is Credit Karma Canada Safe to Use:
Yes, the product is safe, at least it’s as safe as your username and password aren’t hacked, and the data is pulled from TransUnion, so, it’s also very accurate.
How to Print Credit Report Credit Karma Canada?
I was able to print my report, simply by rick clicking with my mouse, selecting print, and was able to print my multi-page report.
Good luck with your wealth-creating journey.
If you liked this post, you might also like this one: How Do You Know When It’s Time to Sell Your Business? It’s Not All About the Money.
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Also, I published a book during the summer of 2018, “The Kickass Entrepreneur’s Guide to Investing, Three Simple Steps to Create Massive Wealth with Your Business’s Profits.” It was number 1 on Amazon in both the business and non-fiction sections. You can get a free copy here.
