Don’t Panic Just Yet If you haven’t filed your TaxesApril 24, 2018
“Your Credit Score Just Went Up a Few Points!!” This message is the subject in the e-mail you just got from Credit Karma… Sounds exciting and all too familiar doesn’t it?
You login to your Credit Karma account to see that your score is high enough to get approved for that loan you’ve been working so hard for. You apply with a loan officer and the application gets denied. They provide you with your score and it is no where near what you’ve seen on Credit Karma. When you go to show the officer you’re score from Credit Karma, the loan officer dismisses it like it means nothing. This scenario sound familiar also?
Credit Karma’s scores tend to be incorrect because lenders use your FICO score as opposed to Vantage score that is used by Credit Karma. Although the two methods are similar, they are different at the same time. Below a comparison of the differences:
The factors are weighted differently, which causes the change in the score. Although the accounts are the same on your credit reports, they are scored different, giving more importance to certain factors than others. The crazy thing is there are more versions of your credit score. This can depend on what you’re applying for. More weight is given to accounts that are related to real estate when applying for a home mortgage. And the same holds true for auto accounts when looking to purchase a car loan.
Sources that are more reliable for your FICO score are freecreditscore.com, myfico.com, and a few others out there. These sites, however, offer limited report and scores for free, and require a paid subscription for you to view your report and scores from all three credit bureaus (Experian, Equifax, and Transunion).
Credit Karma is useful for knowing what’s showing on your report for Equifax and Transunion, as well as locating credit cards that you may qualify for, however that’s about it.
Don’t be fooled by the shenanigans…