More evidence to ignore CK's "advice"

For just about anything you want to get off your chest about credit cards.
6 posts
MemberSince99
Centurion Member
Centurion Member
 
Posts: 4913
Joined: Sun May 20, 2012 4:35 pm
Location: WI

More evidence to ignore CK's "advice"

Postby MemberSince99 » Sat Dec 14, 2013 8:01 am

I got an email this morning from Credit Karma warning me how my information is very out of date. I never bother with checking it anymore as it's kind of pointless.


So I clicked the link and after logging in it updated. My CK score jumped 18 points to 742 woo hoo. (like that means a thing).


I had an 8 dollar balance hit on one card so CK was delighted to see I was "using" this card where before it was "unused". (Their words). That is completely misleading as in fact I have used it EVERY month I simply managed not to let a balance hit. But as we know, to them a 0 balance means you aren't using it. They really should change that.


What concerned me more though is their grading of utilization. Did you know that if you have 40% utilization, they grade you a "B" for that? Everything I've read indicates 40% isn't a HUGE red flag but it's considered higher than optimal. 0% is a "C";. What they seem to fail to realize is that just because you don't let massive balances post to your cards doesn't mean they are just sitting in the sock drawer.


I guess the old adage you get what you pay for is true when it comes to CK advice. Just take what they tell you with a really big grain of salt. I know I've posted this before but I have not had a ticket, accident or claim in 25 years with hundreds of thousands of miles driven in that time, and my credit isn't bad, and they give me an auto insurance rating of "very poor". It's kind of a joke really.


flan
Centurion Member
Centurion Member
 
Posts: 387
Joined: Tue Apr 09, 2013 10:16 pm
Location: chicago

Postby flan » Sat Dec 14, 2013 7:19 pm

MemberSince99 wrote:I had an 8 dollar balance hit on one card so CK was delighted to see I was "using" this card where before it was "unused". (Their words). That is completely misleading as in fact I have used it EVERY month I simply managed not to let a balance hit. But as we know, to them a 0 balance means you aren't using it. They really should change that.


That's not just CK, that's everyone who is looking at your credit report. The outside world only gets to see the balance that's reported. They don't see charges or payments. If it posts a zero dollar balance, then as far as anyone else can tell, you're not using it. There's a fico score metric for the number of active accounts, which is based on the accounts that have reported a non-zero balance in X time period, so it's not just TU's new account score that dings you for it.

wyfei123
Green Member
Green Member
 
Posts: 8
Joined: Sat Dec 28, 2013 3:59 am
Location: San Francisco, California & Melbourne, Australia

Postby wyfei123 » Sun Dec 29, 2013 5:46 am

Well, CK told me my score is now 684 while my real score is 706. And they recommend me to apply for "Fair" level cards but I got approved for CSP and Chase UA within 2 months.
Cards:
Chase Sapphire Preferred - 6K
Chase Freedom - 4.5K
Chase United MilagePlus Explorer - 5K
Amex Blue Cash Preferred - 10K
Amex Costco TrueEarnings - 7.5K
Citibank ThankYou Preferred - 6K
Citibank Forwards - 1.2K
Discover it for Student - 1.5K
Bank of America Cash - 1.2K
Bank of America Travel - 0.6K
Barclay Rewards - 1K

Mrm-na
Gold Member
Gold Member
 
Posts: 34
Joined: Thu Sep 19, 2013 7:53 am
Location: California, US

Postby Mrm-na » Mon Dec 30, 2013 8:01 pm

I find that both the Credit Karma and Credit Sesame scores aren't nearly as mobile as my FICO scores. My CK and CS scores move maybe 10-20 points while FICO is moving 60-100.
I've read remarks before about FICO putting people in "buckets", and I guess CK doesn't have me "bucketed" correctly. Anyway, I'm glad that the real FICO is much easier to manipulate than CK. CK seems totally uninterested in anything that happens on my report. The number hardly ever changes more than a few points.

The only thing I find truly useful with Credit Karma is to know when updates have actually posted to my TransUnion report. Their scoring and advice are pretty useless to anybody who puts much effort into learning about this stuff. The advice might be better than nothing for people who know nothing about credit.

Credit Sesame - I'm seriously thinking about canceling that account. It only updates once a month, navigating the site seems to be basically broken, it gives almost no information at all (way less than CK), and they are constantly sending email spam. I guess it's my only window into Experian so closing it would be foolish, but I really hate everything about CS.

MemberSince99
Centurion Member
Centurion Member
 
Posts: 4913
Joined: Sun May 20, 2012 4:35 pm
Location: WI

Postby MemberSince99 » Mon Dec 30, 2013 8:03 pm

Good for you for getting CSP. It seems they have lowered the bar on that quite a bit as I read on FICO someone said they got approved with a 630 score. I found that all but impossible to believe but that's what they claimed.

MrClean
Green Member
Green Member
 
Posts: 5
Joined: Mon Dec 09, 2013 11:37 am
Location: TX

Postby MrClean » Fri Jan 03, 2014 10:13 am

CK also seems to report utilization improperly if you have the misfortune of having accounts closed (by the grantor) which still have balances on them. If the account is closed, it obviously doesn't count towards your total credit limit, but it also stops counting the balance as part of your utilization. That can make your utilization (and CK score) look much better than it actually is.

For instance, say you had two cards, each with $500 credit limits, with one maxed out and no balance on the other. If the grantor closes the maxed out account (which can happen due to a general history of delinquency, even if you're current for quite some time afterward), your real total credit limit would then be $500 and your utilization would be 100% because the balance is still counting, even though the card is closed. CK's system would claim your utilization is 0% because it only counts the card that's still open. It's like the other balance doesn't exist at all to them if the card is closed. And there's a drastic difference in score between 0% and 100% utilization, of course.

Obviously, that's a bad situation to be in, anyway. But if you relied completely on what CK says, you'd mistakenly think your score was much better than it really was (even if it ain't so hot in general).



Return to “General Credit Card Talk”

Who is online

Users browsing this forum: No registered users and 2 guests