First, understand that Credit Karma makes money by giving you a free score in exchange for learning more about you and charging advertisers to put ads in front of you. Because Credit Karma is pulling your credit score, its system knows a lot about you, and it can carefully tailor those ads to your spending habits. More targeted ads are better for advertisers since they don't waste money putting ads in front of people who would never use their services and usually allow the advertising company to charge more per ad.

The scores and credit report you receive from Credit Karma come from TransUnion and Equifax, two of the three major credit bureaus. They also use VantageScore credit scores, a collaboration among all three major credit bureaus. This is similar to the FICO score you may have heard about, but more than 90% of lending institutions use the FICO score to make decisions, not the VantageScore report.

For a more in-depth look at the credit scoring and reporting process, read this article.