Is Credit Karma Accuracy A Problem?
Credit Karma accuracy has become a recent narrative forcing many end users to question the validity of the credit score and information they provide. Although Credit Karma promises to provide you with your credit score and credit report for free is it really useful if it’s not accurate?
This question begs the need and motivation for creating this article. First and foremost credit must be given when credit is due. Credit Karma is one of the first of its kind to provide such information as it has and continues to do without a cost for the end user. Although this seems common place now this has definitely not been the case.
This has to be stated before going any further.
With that said it is good to begin with a synopsis of what Credit Karma provides.
- Credit Karma provides you with a credit score and credit report derived from the credit report agencies of TransUnion and Equifax.
- Credit Karma provides you a credit score using the Vantage Score Model.
- Credit Karma is now aligned with Turbo Tax providing its customers with aid with Tax Refunds.
- Credit Karma also is aligned with Car Insurance allowing you to find the cheapest rates.
- There is also now Credit Karma money providing its customer base with a checking and savings account.
- Credit Karma has a monitoring system that provides you alerts.
- Credit Karma is now in the business of lending and recent ads show a Credit Karma credit card.
Currently the 7 bullet points outlined is the latest of Credit Karma’s services. However since it’s an ever revolving company there will be no shock if a new feature is added in the future. It is also important to note that there is no mention of the acclaimed Fico score in the list of provided services or any mention of Experian the third of the 3 credit reporting agencies. The reason being is simple Credit Karma does not provide it.
This begs another question: If Credit Karma does not provide a Fico Score and leaves out the Experian credit report, is the alternative Vantage Score they do provide worth it?
“Another question really I know and believe me I get it, but it had to be addressed’. Rest assured both questions will be answered. In fact I will start with the 2nd question first and end the suspense. The answer is emphatically yes, it is definitely worth it. Credit Karma derives its score from two of the three reporting Agencies which is extreme value in itself. In addition the Vantage score they provide is becoming more widely used as it encompasses a more complete scoring model than the Fico Score.
So why all the negative press and questions on Credit Karma accuracy?
Unfortunately many people are looking for their Fico score and are discouraged when they find out they provide the Vantage score. There can also be a huge point variance between the two models only exasperating the question on accuracy. However this is not a reason to discount Credit Karma.
The Vantage scoring model is actually quite impressive.
In fact if you are not familiar with the Vantage score you are in luck here is a brief synopsis of how it works.
VANTAGE SCORE HOW IT WORKS
Vantage score uses advance algorithms that allows a deeper set of credit data to understand borrowing and payment patterns. Essentially there claim is they have better modeling techniques which allows them to provide better benefits to not only lenders but consumers. As with Fico they analyze the data supplied by the 3 credit reporting agencies Equifax Experian and Transunion.
The difference is they do not just rely on trended credit data, their models also incorporate static data which inflects more of an individual credit history records. Now, on the validity of the Vantage score claims of their model being better is up for debate.
The truth is the decision on which scoring model is better is strictly based on opinion and if the creditor you are requesting a loan from uses it. Also it is worth mentioning trended credit data focuses on credit behaviors over time and may not reflect a static nature.
Now that you have a basis of understanding the vantage score you are at least aware of how the score reflected on Credit Karma can vary from Fico.
Relatively speaking your Credit Karma score should be close to your Fico score, and I have also seen some cases it is actually the same as Fico. Unfortunately those cases are few at best which has caused the controversy of validity.
Another point to keep in mind is the range of your credit score is more important than the precise number, which will vary by source and edge up or down often.
So with everything pointed out we circle back to the original question:
Is Credit Karma Accuracy a problem, I can confidently say no.,