Credit Karma vs Big 3 (TU \ EQ \ EX)

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ingramjuan
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Credit Karma vs Big 3 (TU \ EQ \ EX)

Postby ingramjuan » Mon Dec 15, 2014 8:11 pm

After seeing a of people talk about Credit Karma website to check your credit score, I decided to visited the site to see what's it about. My question is how does it compare to the big 3? Can I truly use that site to know where my credit score stands for free?? :confused:
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PlyrStar93
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Postby PlyrStar93 » Mon Dec 15, 2014 9:27 pm

The credit score from the credit bureaus directly are not FICO (except there is an option to get FICO score from Equifax), so they mean nothing except for the so-called educational purpose. Buying FAKOs can be a waste of money, though in some cases the credit bureaus make it hard to find a credit report only product.

Credit Karma does not provide FICO score. In the old CK version it provides TransUnion New Account score (which is worthless except for educational use) and VantageScore 2.0, while the new CK provides VantageScore 3.0. Only VantageScore is used by a few lenders (according to VantageScore website), so at least it may provide a little bit value than nothing. The report and score are based on TransUnion data.
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otter
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Postby otter » Mon Dec 15, 2014 9:37 pm

ingramjuan wrote:After seeing a of people talk about Credit Karma website to check your credit score, I decided to visited the site to see what's it about. My question is how does it compare to the big 3? Can I truly use that site to know where my credit score stands for free?? :confused:


There are literally hundreds of scoring models based on the standard credit report. Each credit report can be scored with different scoring models- some are the model that bureau is pushing (Credit Karma uses the TU New Account score), another is VantageScore which was created by the big three to push FICO out of the way, and some are special lending situations like Auto lending scores. So what matters? The only ones which really matter are the ones used by creditors to determine your creditworthiness. Almost every creditor which checks your report uses FICO and in some (or most) cases their own scoring model. No one uses the scoring model CK uses (AFAIK). In spite of the big three's assertions, no one uses VantageScore, either. It's FICO by a wide margin.

So how accurate is the score from Credit Karma (where "accurate"= close to FICO)? Depends. Some people's CK score stays close to FICO, others are 100 points or more away. Keep in mind CK uses TransUnion(as mentioned above) so you are only getting one third of the picture. Checking CK to see whether you should apply for an Amex(who pulls Experian almost exclusively) is pretty useless IMO.

There are a few ways to get a true FICO score from TransUnion (WalMart CC, Discover, Barclay's), but if you want all three, you will have to buy them.

The best features of Credit Karma are: (1) Under my finances, you can see your full credit report. (2) The user submitted credit reviews can sometimes have useful information, although you sometimes have to sift through the users who exaggerate sometimes. (3) The credit report card and simulator are somewhat interesting although not entirely accurate.

So Credit Karma is somewhat useful... if you don't plan on applying for credit soon, it's probably useful for keeping track of what's going on with your TU report. For the price... it's definitely a bargain!
In my Wallet:
  • Amex PRG NPSL[3-14, bd 91]
  • Sallie Mae MC $8000[1-14]
  • Chase Freedom $4700[1-14]
  • Discover It $2750[8-13]
  • BoA UCF Alumni Cash Rewards $5000 [3-15]
Sometimes in my Wallet:
  • GM BuyPower WEMC $5000[9-14]
  • Wells Fargo Propel 365 Amex $7000[4-14]
  • Barclaycard Arrival WEMC $7000[3-14]
  • BoA Better Balance $3000[2-15]
In my sockdrawer: Amex BCE $1000[10-13, bd 91], OCCU Duck $10000 [11-13], The Sportsman's Guide Visa $8000[8-14], Chase Slate $4000 [9-14]Delta Gold Amex $2000 [2-15 bd 91], Diners Club MC $20000 [10-14] Commerce Bank Visa $2000 [3-15] Citi Double Cash $1000 [3-15]
Total CL: $90450

takeshi
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Postby takeshi » Tue Dec 16, 2014 7:39 am

ingramjuan wrote:My question is how does it compare to the big 3?

They all provide FAKO's. FICO scores are not generated by the CRA's. They are products of the [color="red"]F[/color]air [color="red"]I[/color]saac [color="red"]Co[/color]rporation. You'd need to go to myFICO to obtain FICO's but even then you need to keep in mind that the scores they provide are generated using the 08 model.

ingramjuan wrote:Can I truly use that site to know where my credit score stands for free?? :confused:

You don't have just one score. Scores are generated using the data in your reports. For any given model you have 3 scores -- one with each of the 3 major CRA's. Even if you get a FICO you need to keep in mind that there are a number of different FICO models used by creditors. 08 is used by a lot of credit card issuers but other models are used as well. Don't rely on a score generated by one model to determine a score generated by a completely different model. Expect different algorithms to produce different results.

The only free FICO's are the ones mentioned above that are provided by creditors to their customers in addition to some other creditors such as PenFed, FNBO, and I think DCU.

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Postby flan » Tue Dec 16, 2014 8:35 am

otter wrote:There are literally hundreds of scoring models based on the standard credit report. Each credit report can be scored with different scoring models- some are the model that bureau is pushing (Credit Karma uses the TU New Account score), another is VantageScore which was created by the big three to push FICO out of the way, and some are special lending situations like Auto lending scores. So what matters? The only ones which really matter are the ones used by creditors to determine your creditworthiness. Almost every creditor which checks your report uses FICO and in some (or most) cases their own scoring model. No one uses the scoring model CK uses (AFAIK). In spite of the big three's assertions, no one uses VantageScore, either. It's FICO by a wide margin.



only the mortgage industry is totally dependent on fico. Everyone else (really, *everyone* else) uses other things, either instead of, or in addition to, the FICO score. Some of those products are sold by fico, some are provided by the bureaus, some are in-house (particularly at big banks, who have lots of smart people figuring out how to make them money), some come from other third parties.

Even if a lender gives you a fico score, and tells you which one it is, it just means that they used that score as part of the process. It doesn't tell you anything about what else they might have used, and it might not be a real factor. They may have decided based on another metric, which they don't have to tell you. Or they may use a fico score for a binary yes/no, and other factors to decide terms.

Whatever, you're not going to get the scores that the lenders actually use, and paying for something that's meaningless is pretty dumb. Paying for a *report*, might make sense, but paying for a score is stupid. Understand what goes into the scoring, and pay on time, and don't borrow more than you can afford.

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Postby thom02099 » Tue Dec 16, 2014 9:52 am

As stated above from others, CreditKarma (and others, such as Credit Sesame, etc) are for educational purposes. CK does offer their "full credit report" as a beta, but they rely on information that may or may not be timely. You may have paid off an account and it could take 1-2 cycles or maybe more, before it shows up as paid on CK, thus influencing the score (positively or negatively) they generate.

Also, scores only matter if you're applying for new credit. On a daily basis, they are meaningless.
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otter
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Postby otter » Tue Dec 16, 2014 3:21 pm

flan wrote:only the mortgage industry is totally dependent on fico. Everyone else (really, *everyone* else) uses other things, either instead of, or in addition to, the FICO score. Some of those products are sold by fico, some are provided by the bureaus, some are in-house (particularly at big banks, who have lots of smart people figuring out how to make them money), some come from other third parties.

Even if a lender gives you a fico score, and tells you which one it is, it just means that they used that score as part of the process. It doesn't tell you anything about what else they might have used, and it might not be a real factor. They may have decided based on another metric, which they don't have to tell you. Or they may use a fico score for a binary yes/no, and other factors to decide terms.

Whatever, you're not going to get the scores that the lenders actually use, and paying for something that's meaningless is pretty dumb. Paying for a *report*, might make sense, but paying for a score is stupid. Understand what goes into the scoring, and pay on time, and don't borrow more than you can afford.


I mostly agree with that. I think the degree the lender relies on FICO depends on how big they are. The bigger ones tend to rely on other metrics other than FICO. That explains why some people on myFICO get approved from, say, BoA with a 650 FICO while I keep on getting denied with a 750. I definitely think every lender is impressed and/or turned off by certain things in credit reports and that's part of their internal model. Some lenders like Barclaycard are spooked by customers with lots of inquiries and new cards, others like the BMO/Harris Diners Club don't seem to care and are impressed more by income (and the rumor is perhaps the age of the applicant). It would be nice if creditors let us know what they are looking for, but they are all mum about their scoring.
In my Wallet:
  • Amex PRG NPSL[3-14, bd 91]
  • Sallie Mae MC $8000[1-14]
  • Chase Freedom $4700[1-14]
  • Discover It $2750[8-13]
  • BoA UCF Alumni Cash Rewards $5000 [3-15]
Sometimes in my Wallet:
  • GM BuyPower WEMC $5000[9-14]
  • Wells Fargo Propel 365 Amex $7000[4-14]
  • Barclaycard Arrival WEMC $7000[3-14]
  • BoA Better Balance $3000[2-15]
In my sockdrawer: Amex BCE $1000[10-13, bd 91], OCCU Duck $10000 [11-13], The Sportsman's Guide Visa $8000[8-14], Chase Slate $4000 [9-14]Delta Gold Amex $2000 [2-15 bd 91], Diners Club MC $20000 [10-14] Commerce Bank Visa $2000 [3-15] Citi Double Cash $1000 [3-15]
Total CL: $90450

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Xorand
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Postby Xorand » Wed Dec 17, 2014 10:34 am

I pay for the three FICO scores from FICO and also have had a Credit Karma account for years. CK uses TransUnion as the basis of its data, so it would most closely correlate to the TU FICO score. Here's how mine compare as of this post to give you an idea of comparison:

FICO Experian: 722
FICO Equifax: 744
FICO TransUnion: 751
Credit Karma (TU): 777

Note that all three of my FICO scores have gone up in the last couple months while my Credit Karma score dropped 8 points in the same time period.
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Postby Cre » Thu Dec 25, 2014 12:15 pm

Considering that the vast majority of people's credit scores that I've seen/read fall within a 120 point range between 680 and 800, or basically within the 700's, then the difference in credit worthiness appears to me to be differentiated within 100 points, not 900 or 1,000 points. For example, I've never heard of a credit score less than 550, nor greater than 850, so why bother with using such a broad range?

So within this more narrowly defined and realistic 100 point range, the difference between 722 and 777 appears quite large to me. That would give me some concern about the value of the Credit Karma score. Perhaps it is more positively weighted (inflated) to make customers feel good about themselves, so that they will continue to subscribe?
Current Cards:
AmEx Platinum Charge: NPSL, $450 AF
AmEx Reserve Credit: $30K limit, $450 AF
Chase Slate Visa Credit: $32K limit, No AF
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Near Term: Need a good MasterCard for places that won't accept AmEx or Visa
Long Term: Will downsize out of one or both current AmEx cards to reduce AFs

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otter
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Postby otter » Thu Dec 25, 2014 6:59 pm

Cre wrote:Considering that the vast majority of people's credit scores that I've seen/read fall within a 120 point range between 680 and 800, or basically within the 700's, then the difference in credit worthiness appears to me to be differentiated within 100 points, not 900 or 1,000 points. For example, I've never heard of a credit score less than 550, nor greater than 850, so why bother with using such a broad range?

So within this more narrowly defined and realistic 100 point range, the difference between 722 and 777 appears quite large to me. That would give me some concern about the value of the Credit Karma score. Perhaps it is more positively weighted (inflated) to make customers feel good about themselves, so that they will continue to subscribe?


The range of scores which FICO uses is 350-850. I believe CK uses the same range, although various scoring models are a lot wider. As for the range of scores of the average person, I've heard numbers between 680 and 730, depending on how they define the middle (mean, median, other). Keep in mind that on credit forums, people are mindful of their credit, so the score is likely to be better. If you have no baddies and your utilization isn't maxed out on multiple cards, you're likely to be above 700. That's where the creditor's own model comes into play... a user with a 725 FICO with 10 years of history is much more likely to get a card than one with the same score but only a year of credit history.

I don't think CK's scores are inflated... mine certainly aren't because they have been consistently 30-50 points lower than my FICO score. I just think the CK score is not very accurate.
In my Wallet:
  • Amex PRG NPSL[3-14, bd 91]
  • Sallie Mae MC $8000[1-14]
  • Chase Freedom $4700[1-14]
  • Discover It $2750[8-13]
  • BoA UCF Alumni Cash Rewards $5000 [3-15]
Sometimes in my Wallet:
  • GM BuyPower WEMC $5000[9-14]
  • Wells Fargo Propel 365 Amex $7000[4-14]
  • Barclaycard Arrival WEMC $7000[3-14]
  • BoA Better Balance $3000[2-15]
In my sockdrawer: Amex BCE $1000[10-13, bd 91], OCCU Duck $10000 [11-13], The Sportsman's Guide Visa $8000[8-14], Chase Slate $4000 [9-14]Delta Gold Amex $2000 [2-15 bd 91], Diners Club MC $20000 [10-14] Commerce Bank Visa $2000 [3-15] Citi Double Cash $1000 [3-15]
Total CL: $90450



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