How Reliable is Credit Karma Score?

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zrussell
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How Reliable is Credit Karma Score?

Postby zrussell » Mon Oct 21, 2013 12:59 pm

Hello,

I'm wondering how reliable Credit Karma's score is? I subscribed to Discover's Credit Score Tracker, and it was completely bogus -- almost a hundred points off. I know Credit Karma pulls directly from TU, I just don't know how accurate it is.

They said my score jumped 34pts (up) this past week, and I have been paying off my balances so i'm curious of it's merits.

Any thoughts on this?


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otter
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Postby otter » Mon Oct 21, 2013 5:25 pm

From my experience... not very reliable. In my case, the offical TransUnion FICO is usually around 20 points higher than the CK FAKO. With most people, I've heard their CK score is usually higher than the real FICO. I will say that when my CK score moves in one direction, the real FICO score tends to move in the same direction, but that's just me. My accounts are still pretty new, so my score is probably more volatile than the average person's score.

Credit Karma is a useful tool, has good advice, and can definitely help one make good decisions, but if you are counting on a loan or plan on applying for a card, it's recommended you get the real score; because many people who count on Credit Karma get surprised when they are denied.

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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jumbo
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Postby jumbo » Mon Oct 21, 2013 8:14 pm

otter wrote:... because many people who count on Credit Karma get surprised when they are denied.


good one..!

In my experience CK Score - 30 = FICO Score (somewhere in that ball-park)
BofA Cash Rewards | CapitalOne QuickSilver | Discover More
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flan
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Postby flan » Mon Oct 21, 2013 8:25 pm

zrussell wrote:Hello,

I'm wondering how reliable Credit Karma's score is? I subscribed to Discover's Credit Score Tracker, and it was completely bogus -- almost a hundred points off. I know Credit Karma pulls directly from TU, I just don't know how accurate it is.


The CK score is TU's 'New Account Score' (or something very similar; it might be scaled idfferently), which is a score TU sell to lenders to use for making new account decisions. (I don't know if anyone actually uses it, or not, though.) It's TUs guess on how likely you are to default in the first 24 months of a new account.

So, it's not going to track your FICO score terribly accurately, because it places more emphasis on recent history, and discounts older history. It doesn't include closed accounts, for instance, because TU doesn't think an account that's been closed for years is relevant to how likely you are to pay back a new account. It appears to count utilization higher than FICO, appears to have a much higher new account penalty, and maybe counts account age as more important. It also really hates inquiries. (TU's actual product dedupes mortgage and auto loan inquiries; CK doesn't seem to.)

CK's reporting of events (inquiries, limits, usage, etc) is pretty accurate. So it's useful for that, if not for the score's predictive value. Of course, I'm not so sold on the FICO that consumers can get for predictive value, either.

Outside of the mortgage industry, there's real competition for customers, and there's a lot of models that go into a credit approval decision, which include lots of things that aren't in the classic fico scores. Even if the score that they give you is the straight fico score, they don't just say "719 no good; 720, good". They said "720, and won't make us any money in interest, not a fit for this product" or something like that.

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Postby JasonKR » Tue Oct 22, 2013 12:17 am

I would say it is ±10, I would say it is reliable within that range, YMMV
BoA Better Balance Reward- $1,500 (01/13)
Discover It for Student- $1,700 (04/13)
Capital One QuickSilver- $500 (05/13)
Chase Amazon Rewards Visa Card- $700 (10/13)
Citi Forward for Student- $2,400 (10/13)
Amex BCE- $2,000 (10/13)
TransUnion - 722 | Experian - 709 | Card Acquisition Risk Score(Chase) - 710
Credit Karma - 715
(Future card: Chase Sapphire or preferred)
* Gardening till summer of 2014! * too many inquiries :(

takeshi
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Postby takeshi » Tue Oct 22, 2013 8:05 am

It's a FAKO and, like all FAKO's, isn't reliable. It's a given that different algorithm will produce different results. It's handy for tracking general trends but if you want scores then get them directly from FICO.

zrussell wrote:I know Credit Karma pulls directly from TU, I just don't know how accurate it is.

Reporting is accurate. Scoring, however, is not if you're comparing to FICO.

zrussell wrote:They said my score jumped 34pts (up) this past week, and I have been paying off my balances so i'm curious of it's merits.

Any thoughts on this?

Reducing utilization will improve your scores.

zrussell
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Postby zrussell » Tue Oct 22, 2013 2:02 pm

takeshi wrote:Reducing utilization will improve your scores.


Thanks, makes sense -- i've paid off quite a bit in the past few weeks.

Thanks for everyone else's feedback. Good news is that i'll just use CreditKarma for overall trend management rather than actually knowing what my score is. From there i'll just request written reports from the bureaus every 6-12 months then I will know exactly what I have or don't have.

thom02099
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Postby thom02099 » Tue Oct 22, 2013 6:05 pm

Much of the unreliabilty of CK is that closed accounts in good standing are not included, whereas they are with true FICO scores. This is particularly influencial for folks with a long credit history, and closed accounts in good standing showing on FICO reports for 10 or more years, but not on CK. This could be one of the (many) reasons for credit score discrepancies.

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EQ = 846 EX=828 TU = 836 as of 02/2016

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bisbicos
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Postby bisbicos » Tue Oct 22, 2013 8:46 pm

My Fico is 753, however my CK score is 786.
Credit Cards
American Express: Fidelity Rewards (2% cash back) 9.5k
Zync NPSL
Discover: Discover More (5% rotating categories) 12k
Mastercard: Chase Freedom (5% rotating categories) 4.6k
Visa: Citi Forward (5x pts on restaurants) 15.7k
Citi Dividend (5% rotating categories) 5.6
Capital One Journey (1.25% cash back) 1.25k
BofA AAA (5% on gas) 2.5k
PenFed Platinum Rewards (5% on gas 3% groceries) 7.5k

Future Cards
US Bank Cash +
Chase Ink

zrussell
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Postby zrussell » Tue Oct 22, 2013 10:15 pm

bisbicos wrote:My Fico is 753, however my CK score is 786.


Ok so it's definitely not accurate. What is the best way for me to find my FICO scores without applying for a new card (essentially without a hard inquiry)? I know the annual credit report only gives you a report from the credit bureaus -- not an actual score (And yes I know there are different scoring models).

My short/mid-term goal is to get a Chase Sapphire preferred card once I pay off all of my debts and bring my AAoC up to ~ 2yrs. I personally feel my changes will be good with that and a flawless history. My oldest account would be 3 yrs then with the same stats.

Thanks



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