Is Credit Karma Accurate?

Question

I was made aware through one of Brandon Turners podcasts that Credit Karma was a free way to check your credit score.  So last month I signed up and logged in.  Low and Behold my credit score was 732 low-748 high  I was happy.  Today (a month later) without any missed payments or debt credit Karma had me at 722-724.   Freaked out I went into USbank and they had me at 765-805. As I'm typing this post Credit Karma still has me at 722-724.  USbank a company that made it through the housing crash by being very conservative had my credit score 40-80 points higher than credit Karma.  Yesterday my girl friend signed up for credit Karma and had a 550, when we called the bank they said they would not loan us any money until we raised it 100 points.  But when she went to the bank today she had a 648 and we were able to get a conventional loan.  Is credit karma  legit or a fraud made to scare you into signing up for credit cards with high interest rates?  Has anybody else had this problem?

Jerry Bruckenheimer · Answer

Credit Karma is a Fako score only accurate compared to itself. Extreme score fluctuations are common for things have that little or no impact on a real Fico score.

A credit score provided by US Bank regularly through a credit card or checking account is also a Fako, not to be confused with Fico scores provided by US Bank during a mortgage application, Fico 04.

Credit Karma also only calculates AAoOA where a real Fico score calculates AAoA.

Credit Karma is good for routine monitoring and does a fair job of showing you your accounts and providing a basic look at your credit, scores and recommendations should be ignored.

If you want a true picture of your credit, purchase MyFico 3B which provides all the variants of Fico scores including Fico 08 and 04.

A cheaper route is Credit Check Total which will provide with Fico 08 scores for all three bureaus. If you call to cancel within 7 days they will cut your price in half.

Charlie Fitzgerald · Answer

Credit Karma and all other consumer accessible credit score sites, are NOT producing a full history report. 30-35% of your scores are based on trade line history (how long have you had credit). Consumer site reports usually only go back 7 years. Credit Bureau direct reports, accessed by lenders through a credit bureau reporting company (Kroll, CBC, CIT, etc.) get your report with all history. So, scores sometimes will match pretty close between the consumer reports and the bureau direct reports if yiu gave only had credit for 7 years or less. But for every one else, they are only good for a guideline and normally will be lower than the scores a lender will get in their credit pulls.

Hope this helps

Jason Morton · Answer

Thanks for the responses everybody.  I guess I understand that credit Karma score and USBanks Mortgage Loan score are 2 different things.  I wouldn't be so worried about it if was a difference of 20 or 30 points.  But when it is a difference of 60-100 points I have to wonder.

Here is why I was so worried

Me and girlfriend spent 5 months backpacking the PCT, we finish and want to buy a house instead of rent.

I have over $100,000 in liquid, No Debt, 700+ credit rating but I had to quit my job.

Girlfriend has No money, $5000 of school debt, 550 credit score, but an awesome job.

We call 2 different Loan officers at 2 at 2 different banks and they tell us they can not loan to us.  Because I have no income I can not get a loan, and her credit is to low and she can not get a loan.

Next day we go into both banks that denied us on the phone, and get them to run our credit. low and behold her credit is now 648 and they will loan us $200,000 and we can get a house.

Now do you see why I was so frustrated by Credit Karma?  Its not off by a few points its off by 100 points.

Wynn Taylor · Answer

All credit scores are NOT the same. Lending institutions use the FICO credit scores  based on your credit reports. Each credit report (there are 3 main ones) will produce a score based on the info in it.

Credit Karma doesn't own the rights to the FICO score, so they make up there own number that is not an industry standard, nor is in use by any lender or financial institution that I know of. It's just something to sell people. I know Credit Karma is free, but you give them access to your info... You know what they say, when you don't have to pay, you're they product.

Anyway, check you reports and if they are good, pull your FICO scores. Lots of good info at myfico.com.

Best

WT

Jerry Bruckenheimer · Answer

This is a good example of Fako scores, ignore recommendations and "factors" provided by Fako score providers. Fico scores and what goes into them and what makes them move up or down is well studied and predictable at this point. From determining a score drop when going from 0-1 inquiries, from 4 to 5 inquiries, etc. Zero balance on all credit cards to maxed utilization across many cards, crossing AAoA and oldest account thresholds for scoring purposes, score impacts from new loans and paying off loans, the impact of balance transfers, and as Fred said, buying lunch, all predictable. As mentioned, nothing to get bent out of shape about but knowing the actual factors that effect your Fico scores versus predicting Fakos are quite different things.

Fred Heller · Answer

Credit Karma is very accurate in my opinion. I use it to track my credit, and I've always found that it accurately represents my credit situation.

I wouldn't get too bent out of shape over minor fluctuations in your credit score. Whatever algorithm that creates your credit scores must be a secret deeper than anything the CIA has. Nobody knows what goes into it. Maybe you paid for lunch one day with your credit card, and maybe that was enough to drop your score a few points. Bottom line is anything over 700 is gold. Nobody is going to question your credit at that level. Don't sweat it.

Over the years I've watched my credit scores bounce around 10-20 points in either direction for no apparent reason. It used to bother me until I realized that there is no apparent reason or logic for that to happen.

The one time I did take notice was when my credit scores dropped big time in one month (as much as 75 points on one report). I was going to try to find out why, but I received a notice telling me that my credit score had dropped because I lived in "a natural disaster area." This was after Hurricane Ike. So even though my house sustained no damage, and Hurricane Ike had no effect on me whatsoever, I was penalized because I live in the area.

Again, no logic, no reason. It's just the way it is. I wouldn't worry about it.

Is Credit Karma Accurate?

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