Credit Karma Raises $2.5 Million To Take The Mystery Out Of Credit Scores

Credit Karma, a site that looks to help consumers understand, track, and improve their credit scores, has raised a $2.5 million Series A funding round led by QED Investors, with participation from SV Angel, Aydin Senkut, and Founders Fund, via FF Angel.

Credit Karma, which launched in March 2008, is a site that features free credit checks, educational guides, and tools for analyzing your credit score’s current status (presented as a ‘report card’) and for optimizing your credit over time (you can check in on your score on a daily basis if you want to). The are also reviews of various credit cards, as well as sponsored offers based on your current credit rating.

Credit Karma’s tools are all free — the site makes money through advertising and lead gen offers, in much the same way that Billshrink and Mint do. CEO Kenneth Lin says that the site doesn’t ever sell user information, but instead shows users offers that they can elect to pursue. For example, the site might use your credit report to analyze your auto loan rate, and then suggest packages that would give you a better deal.

Credit Karma is also offering a private label version of its product. Sears has partnered with the site to give Sears Cardholders an enhanced version of Credit Karma that sends users a monthly credit update via Email (normal Credit Karma users have to manually check in on the site themselves for an update).