Credit Karma Grew with Focus
One of the most complicated aspects of your life is that of credit. If you have bad credit then you can experience potential job problems and higher borrowing expenses and lost opportunities. You don’t mess with credit. It can make your life a living hell.
Kenneth Lin, saw an opportunity in this sector to help make this process easier and he did. That simple vision would help with Credit Karma growth later one. He was always looking at different business opportunities on the side and realized that credit was a critical component of American life. But the space could be somewhat shady. How many people love to go to Experian, TransUnion, or other companies to keep up with their credit reports?
Not a lot of people.
That’s why he came up with the mission driven firm that he would call Credit Karma.
The Birth of Credit Karma
It was a simple problem that would matter more over the coming years. Credit Karma would rise up and bring about a more friendly alternative for credit issues. Credit is a massive opportunity. You’re sold credit cards from when you’re young. People are exposed to the use of credit cards from friends, family, and acquaintances. It’s an addictive means of paying for expenses can wreak massive havoc.
The idea seems so obvious in hindsight.
Give people more knowledge about credit, and help them find services that meet their needs.
It makes sense in an era where more families need to work harder and hustle to meet expenses. Credit Karma can help to alleviate burdens by simplifying the credit process and saving money over long term. The business is based around information, accessibility, and partnerships.
How Credit Karma Works
The idea was to create a product where users would sign up to Credit Karma keep tabs on your credit score without any additional costs. That’s a simple but powerful hook. From there, Credit Karma could lead you on a credit journey. The site could help you understand your information and work with financial partners to help you get the financial services you need.
Inc magazine notes that “based on your credit history, the company generates targeted offers for financial services including credit cards, student loans, and auto loans. If you opt in to one of those offers, Credit Karma gets paid by a referral fee by the bank or lender–a new credit card customer, for example, could be worth as much as $700. In 2015, the company made around $350 million.”
Who new financial services could be so profitable (/s) ?
Anyway, the value of Credit Karma wasn’t just about the scores but also about regular monitoring, insights, and advice on ways to become a better credit utilizer. Indeed, the firm would focus on that for a while before shifting to aspects of your financial journey. The firm would grow by acquiring other firms such as Claimdog, Approved, Noddle, Snowball, and Haven Money. Led by Lin, the company would expand into all aspects of debt from credit cards to mortgage refinancing suggestions to their free tax service.
They started in one area, hit it hard and then became a part of your life in other financial ways.
Credit Karma knows enough about you that it won’t spam you but will tailor relevant information.
Credit Karma Kept It Lean
The firm knew who it was helping and how it would help and didn’t need discovery capital. It was able to execute on the vision from day one. The brand shows that there’s significant value in simplification and focus on problem that matters to many different people. Credit Karma gradually built up value, attracted capital, talent, etc and didn’t flame out over the years.
The brand found out where it mattered and sustained through the lean times.
Applications such as Lightbox, Easy Apply, and other services are just some of the ways they’ve been able to focus and create something that relates to a better user experience.
When you’re getting comments like this, you know you’re doing something right.
It’s amazing how TurboTax gaslighted me for 4+ years into thinking taxes were incredibly complicated without their assistance – and pricetag. I just filed with CreditKarma and not only was it just as easy+accurate, I also didn’t have to shell out $130 for the service.
— Allen Park (@allenhpark) February 24, 2020
Does Credit Karma have some potential risks from an acquisition standpoint to Intuit? It doesn’t seem to think so as it will fork over quite a bit of value to bring the firm under its umbrella. But isn’t changes to the GLBA Privacy and Safeguards Rules something to be worried about if you’re a manager at Intuit?
It looks like it is a miniscule issue at present as the firm is prioritizing the customer acquisition value that CK brings to the table. The company has a lot going for it and it will be intriguing to see how they grow and develop over time.