Is My Credit Karma Score Accurate?

Can you trust the credit score provided by Credit Karma and similar tools provided on your credit card’s smartphone app? It seems that with just a click of a button, you can view your credit score—but does that number match what an actual credit reporting bureau has?

It is a common misconception that there is a single credit score for each individual. In fact, many types of credit ratings exist, and the type of item for which you are seeking a line of credit weighs components of your credit history differently.

There are two broad categories of credit scores: FICO and the VantageScore. Of the two, FICO is the more common; it was created in the 1950s by a company originally known as Fair, Isaac and Co. VantageScore was created in 2006 by the three major credit bureaus: Experian, Equifax, and TransUnion. While VantageScore uses a different algorithm than FICO, the information used to produce the score is the same. That is because both FICO and VantageScore rely on consumer data from the credit bureau to produce their scores. 

It gets even more complicated. Over the years, FICO and VantageScore have released updated versions of their scoring algorithms. When a lender pulls your credit history, you’re assigned a score based on the version being used. The score may be different when using a later version. The differences may not be drastic, but even a 5 or 10 point change can affect your interest rate—and in some cases, whether you get approved or denied a line of credit.

So, what about those Credit Karma scores? A credit-monitoring tool like Credit Karma is helpful to get a general idea of your financial health, but the score it quotes you is just an estimate. It’s a soft pull on your credit history, which only evaluates top-level categories. The only way to get a complete picture of your credit story is a traditional hard pull and full evaluation of your history; a hard pull will show up on your report as an inquiry, so you don’t want to do request a hard pull more than once per year, if that. 

However, if you’re preparing to make a major purchase such as a house, it’s wise to do a deep dive into your credit history. This gives you the opportunity to clear up any errors and consult with a professional on how to get the highest possible score.

The experts at Scorewell are experienced in helping individuals repair even the messiest credit scenarios. Connect with us for a complimentary consultation to discuss your situation and determine how we can help you achieve your best credit score possible. Email us today!

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