Credit Karma Credit Score Update

[Henrietta Naughton]

CreditKarma works with Equifax and TransUnion, two of the three major consumer credit bureaus, to give you access to your free credit scores and free credit reports. (Experian is the third major consumer credit bureau.)

Credit Karma can offer free credit scores and reports because we make money in other ways. For example, we use the information in your credit profile to make product recommendations that can help you save money. If you use these recommendations to apply for a product, Credit Karma may get paid by the bank or lender.

Your credit scores can be a useful reflection of your overall credit health. But to get the most out of your scores, you must first understand how they work, what they represent and what actually constitutes a good credit score.

Payment history (extremely influential)

The biggest factor in your scores is your history of paying bills on time. Late or missed payments in your credit history could affect your scores significantly.

Credit utilization (highly influential)

Your credit utilization rate measures the amount of credit you use relative to the amount available to you. Most experts recommend shooting for a rate below 30%, meaning you use less than 30% of your available credit.

Free credit reports

On Credit Karma, you can check your free credit reports from Equifax and TransUnion. And as with your credit scores, you can check your free credit reports as often as you like.

Mobile app

The Credit Karma mobile app allows you to check your credit scores on the go. The app also features tools ranging from the new Relief Roadmap to opt-in push notifications that help alert you to potential changes on your Equifax or TransUnion credit reports.

A credit score is a number based on the information in your credit reports. Most credit scores range from 300 to 850, and where your score falls in this range represents your perceived credit risk. In other words, it tells potential lenders how likely you are to pay back what you borrow.

Your credit reports include information about your credit history and activity. The credit bureaus rely on credit scoring models such as VantageScore and FICO to translate all this information into a number.

There are a few key differences between the VantageScore and FICO models, including how they weigh different factors in determining your scores. Both have a score range of 300 to 850, but they differ as to which ranges are considered poor, fair, good or excellent.

A credit score that falls in the good to excellent range can be a game-changer. While financial institutions look at a variety of factors when considering a loan or credit application, higher credit scores generally correlate with a higher likelihood of getting approved.

A good credit score can also unlock the door to lower interest rates and more-competitive terms. And if you have excellent credit scores, you have an even better chance of being offered the best rates and terms available.

On the other hand, if you have poor or bad credit scores, you may be able to get approved by some lenders, but your rates will likely be much higher than if you had good credit. You may also be required to make a down payment on a loan or get a cosigner.

For both the FICO and VantageScore 3.0 scoring models, a history of on-time payments is the most influential factor in determining your credit scores. Your payment history helps a lender or creditor assess how likely you are to pay back a loan.

Your credit utilization is calculated by dividing your total credit card balances by your total credit card limits. A higher credit utilization rate can signal to a lender that you have too much debt and may not be able to pay back your new loan or credit card balance.

A longer credit history can help increase your credit scores by showing that you have more experience using credit. Your history includes the length of time your credit accounts have been open and when they were last used. If you can, avoid closing older accounts, which can shorten your credit history.

The credit scores and reports you see on Credit Karma come directly from TransUnion and Equifax, two of the three major consumer credit bureaus. The credit scores and reports you see on Credit Karma should accurately reflect your credit information as reported by those credit bureaus.

Bethy Hardeman, the former chief consumer advocate at Credit Karma, responded: The scores and credit report information on Credit Karma comes from TransUnion and Equifax, two of the three major credit bureaus.

No. However, the credit score Credit Karma provides will be similar to your FICO Score. The scores and credit report information on Credit Karma come from TransUnion and Equifax, two of the three major credit bureaus. Your scores can be refreshed as often as daily for TransUnion and weekly for Equifax, with a limited number of members getting daily Equifax score checks at this time.

VantageScore and FICO are the two big rivals in the credit rating business. Credit Karma uses VantageScore. Their models differ slightly in the weight they place on various factors in your spending and borrowing history.

Credit Karma uses two of the three major credit bureaus and scores your creditworthiness according to the widely used (but not quite as widely used as FICO) VantageScore system. Your score should be within the same range as it is everywhere else, including with the major credit bureaus and its many competitors.

On the customer review site ConsumerAffairs, some people have reported that their Credit Karma score is quite a bit higher than their FICO Scores. Whether these posts are reliable is unknown, but it is worth noting.

Credit Karma is a multinational company founded in 2007 by Kenneth Lin, Ryan Graciano, and Nichole Mustard. Today, Lin is chief executive officer, Graciano is chief technology officer, and Mustard is chief revenue officer.

New here! So, I just got a new personal loan through Lending Club. Not sure if that was the best option but, I came here after instead of before. Lol. I was sure it would be denied because CK was showing a score of 609. But, when I received the credit score disclosure from Lending Club it showed a Transunion score of 711. Everything I read said that CK is typically too high so, I was surprised. I have now spent many many hours reading these forums and I'm looking forward to being more credit savvy in the future.

I've had my CK scores be higher and lower than my Fico scores, my husband's were the same as well. Currently CK has my Tu lower than my Fico, and my EQ higher. You never can tell simply because Vantage scores use a different formula than Fico.

Between my Chapter 13 discharge and the bankruptcy falling off my reports, the TU and EQ scores shown on CreditKarma (Vantage 3.0) were always 50-75 points higher than my FICO 8 scores; once the bankruptcy fell off, even though my Vantage scores rose nicely, my FICO scores rose as much as 135 points, and suddenly it was my FICO scores which were higher.

@expatCanuckI've even noticed that VS 3.0 gave me a slight bump when I had brief periods of all zero while switching a reporting card. Gained 1 point on each on EQ and TU VS 3.0 scores while I was getting hammered on FICO 8 and FICO 9. I no longer do AZEO so all zero won't be an factor for me anymore, but was interesting nonetheless.

My TU Vantage likes me to be at AZE3 and have a higher balance. When I go to AZE2, I typically lose 13 - 18 points. It's quite comical to see my FICO go up and my FAKO go down by the exact same action.

All FICO Score products made available on myFICO.com include a FICO Score 8, and may include additional FICO Score versions. Your lender or insurer may use a different FICO Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more

FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Scores and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.

Offers that appear on this site are from third-party advertisers from which Credit Karma typically receives compensation. Except for mortgage loan offers, this compensation is one of several factors that may impact how and where offers appear on Credit Karma (including, for example, the order in which they appear).

Other factors may include: your credit profile and what products we think you want. It is this compensation that enables Credit Karma to provide you with services like free access to your credit scores and free monitoring of your credit and financial accounts. Credit Karma strives to provide a wide array of offers for our members, but our offers do not represent all financial services, companies or products.

When you apply for credit, potential creditors may want to gauge how likely you are to pay your bills on time. Many creditors use FICO credit scores to assess applicants, manage accounts, and determine rates and terms.

A FICO score is a three-digit number ranging from 300 to 850 (and up to 900 for some industry-specific scores). These scores are largely based on your credit reports (statements generated by the consumer credit reporting bureaus that detail your credit activity and current credit situation) and can help creditors assess how likely you are to repay debt.

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