The atypical scoring model used by Credit Karma, coupled with the absence of information from Experian, the third of the three major credit reporting agencies, tends to make Credit Karma scores differ from scores pulled by other companies and financial institutions. The credit service is usually within range and a good indicator of your overall credit wellness.
You can also get a report with a thin credit history through this model, which is super-helpful for those seeking to build their credit from nothing. As mentioned, this number will likely be lower than the score you see on Credit Karma but will fall within the same general range.
For example, if you were applying for a mortgage with a home loan company, it would probably use a score that is specifically developed for mortgage loans. Similarly, if you were to apply for a car loan from an auto lender, it will use its own score designed to predict the likelihood of you defaulting on an auto loan.
This can result in an even lower credit score from these lenders. Loans Personal Loans. Home Loans. Auto Loans. Auto Refinance My Loan. Get a New Loan. Auto Insurance. Home Buy a Home. Refinance My Loan. Home Insurance. Real Estate Agents. Resources Identity Monitoring.
Unclaimed Money. Mortgage Lender Reviews. Credit Karma's business model is not entirely altruistic. It is a for-profit business that makes money by giving you a free credit score in exchange for learning more about your spending habits and charging companies to serve you targeted advertisements.
Credit Karma places advertisements in front of its users, hoping that they will respond to them by clicking on them. Many of these advertisers are lenders, and Credit Karma may earn a fee if you apply through one of its links. Your personal data is valuable stuff to advertisers, and they pay more to target it.
With more than million users, this is a healthy revenue model for Credit Karma. Investopedia reached out to Credit Karma to ask why consumers should trust Credit Karma to provide them with a score that is an accurate representation of their creditworthiness.
We provide VantageScore credit scores independently from both credit bureaus. The credit scores and reports you see on Credit Karma reflect your credit information as reported by TransUnion and Equifax, two of the major consumer credit bureaus.
These scores are not estimates of your credit rating, which makes them accurate and reliable. FICO is a model used to create a score by looking at your files from the three major credit reporting bureaus. VantageScore follows much the same process, except that its scoring model was actually created by the credit bureaus. Although VantageScore is less known to the public, it claims to score 30 million more people than any other model.
If you're young, that could be important. VantageScore and FICO are both software programs that are used to calculate credit ratings based on consumers' spending and payment history.
VantageScore, released in , was developed by the three leading consumer credit agencies, Experian, Equifax, and TransUnion. For that matter, you may get a different FICO score from various sources at any given time, depending on whether the source uses a specialized variety of FICO or the most-often-used base model, and which of its many versions is used. The key point is, your score should be in the same range on any or all of those models.
The differences are relatively minor:. Both FICO and VantageScore have the same straightforward goal: To predict the likelihood that a consumer will default on a debt sometime in the next 24 months. And that's why you shouldn't get too fussed about the differences.
Every one of your credit scores should be in the same general range, but they'll never be identical. Different lenders use different scores. There are many other scoring models and no practical way for you to keep track of or access all of them.
Credit Karma's Hardeman recommends picking one and sticking with it. The first question is whether you need Credit Karma's services, free or not. And that may depend on how urgently you need detailed information on your credit status. That's enough for most of us most of the time.
If you're about to apply for a mortgage, or you're working to improve your credit rating, or you want the related services Credit Karma offers, you may want this access to your credit report and to the related services the company offers.
Credit Karma uses two of the three major credit bureaus and scores your creditworthiness according to the widely-used but not quite as widely used as FICO VantageScore system. Your score should be within the same range as everywhere else, including the major credit bureaus and its many competitors. On the customer review site ConsumerAffairs. Whether these posts are reliable is unknown, but it is worth noting. If your Credit Karma score isn't accurate, the problem is probably elsewhere.
That is, one of the bureaus made an error or omitted information. Or, the information might have been reported to one bureau but not others.
Using Credit Karma won't hurt your credit score. Your search is a self-initiated inquiry, which is a "soft" credit inquiry, not a "hard" inquiry. Credit Karma updates its scores once per week. Cards for Fair Credit. Secured Cards. Search Credit Cards. Loans Personal Loans. Home Loans. Auto Loans. Auto Refinance My Loan.
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