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Are Credit Karma Credit Scores Inaccurate?


When it comes to big purchases, rely on your FICO Score.


It appears Credit Karma members are upset because of the accuracy of their credit scores. The problem was not that they were too low – they were too high and higher than the FICO scores. So, members took their grievances to Twitter and complained because their score was not as good a shape as Credit Karma had led them to believe.


Allow me to unravel the mystery: years ago, a FICO score was the only one to exist. FICO dominated the credit reporting business. Credit reporting agencies didn’t appreciate FICO’s capitalism, so they came up with their credit scoring and analysis brand. Credit Karma uses the “Vantage Score Credit Modeling System.” Specifically, they use the 3.0 version.


If you are going to develop another credit scoring model, you have to bring something different to the table to differentiate yourself. So these various models will rate certain aspects of your credit history higher or lower than FICO. To complicate things, industries such as car sales and realty have their credit scoring model specific to their industry to evaluate credit.


Despite the competition in the credit sector, the current version of the FICO score sets the mark.


As far as the upset members are concerned, consider that the service Credit Karma provides is free. When “free” is a factor, you will not get the top of the line credit scoring model such as FICO. I don’t know how much higher or lower these scores are than FICO, but I can’t imagine that they are as far apart as claimed. Of course, it would be helpful if Credit Karma was a little more transparent about their credit scoring methodology.


The bottom line - Check your FICO score if you are about to make a big purchase. That will be closer to what most lenders look at to evaluate credit!



Bob Brooks

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