Intuit Is Buying Credit Karma for $7 Billion. Here's Why You Should Care

Two companies that help people use simple tools to manage their money are teaming up to create a digitized, personalized “financial assistant.”

Intuit, the software behemoth behind TurboTax, QuickBooks and Mint, announced this week that it is acquiring Credit Karma — a company that has long provided free credit scores and now offers free tax filing, too — in a deal worth $7.1 billion.

Intuit says the combined company will be able to show you your complete financial picture, including your income, spending and credit histories, and you’ll be able to use that information to take advantage of preapproved loan and credit card offers, higher-interest savings accounts and advice to help improve your credit score.

“By joining forces with Credit Karma, we can create a personalized financial assistant that will help consumers find the right financial products, put more money in their pockets and provide insights and advice, enabling them to buy the home they’ve always dreamed about, pay for education and take the vacation they’ve always wanted,” says Sasan Goodarzi, CEO of Intuit, in a news release.

Executives say that by leveraging artificial intelligence and connections to more than 100 partners, the new platform will bring cost savings to both consumers and financial institutions. Goodarzi says the effect will be transformative.

“Our mission is to power prosperity around the world with a bold goal of doubling the household savings rate for customers on our platform,” he says.

Good karma

When Credit Karma was founded in 2007, the San Francisco-based startup became a pioneer in the financial-services industry by offering credit scores for free. Today it offers credit monitoring and financial advice to more than 100 million users worldwide.

“We started Credit Karma with a goal to build a trusted destination for all consumers, to make financial progress regardless of where they are in life,” says CEO Kenneth Lin. “We saw the opportunity to enrich people’s financial lives through transparency, simplicity and certainty.”

People who sign up get personalized tips on how to raise their credit scores, including which bills to pay off first. The service also ensures your credit report is free of damaging mistakes, which are a lot more common than you might think.

And while Intuit remains the No. 1 biggest name in tax-filing software — it serves 50 million customers around the world through TurboTax and other products — Credit Karma launched its own free service a few years ago. It even includes free audit defense, in the event the state or IRS starts questioning your file.

Intuit expects the deal to close later this year, though Credit Karma will continue to operate independently.