Why is my Credit Karma score different?
It is likely that you have seen the hilarious advertisements for Credit Karma; like the commercial featuring a couple whose neighbor loves wind chimes or the terrible roommate trying to become the latest internet sensation. The premise behind these advertisements is that by monitoring your credit score on Credit Karma you will be in a better position to move into better living conditions. It is true that improving your credit could open more financing options when applying for a mortgage.
However, several mortgage bankers have reported back that their customers credit score on Credit Karma and the one being pulled by the lender are different. While the difference in credit scores might not always be a significant one, this difference is confusing at best but deceptive at worst. Why would there be a difference between what our customers are seeing on Credit Karma and what we are pulling?
For many, they feel that their credit score is a single, fixed number that measures their ability to repay a loan. But in reality, a person’s credit score can be different based on the criteria used when pulling their credit. The agencies who generate these credit scores use different algorithms to do so; sometimes even within that agency there are multiple versions—all of this can contribute to different scores. For example, two widely used scores, the FICO credit score and the VantageScore both range from 300 to 850 but the factors making up the score are weighted differently, according to an article on CNBC. The variety of factors such as payment history and total debt are rated differently causing a person’s VantageScore and FICO credit score to be different.
FICO Score Factors:
- Most influential: Payment history on loans and credit cards
- Highly influential: Total debt and amounts owed
- Moderately influential: Length of credit history
- Less influential: New credit and credit mix (the types of accounts you have)
- Most influential: Payment history
- Highly influential: Age and type of credit, percent of credit limit used
- Moderately influential: Total balances and debt
- Less influential: Recent credit behavior and inquiries, available credit (Source: CNBC)
How credit scores are determined can be confusing but no matter the number you are viewing, monitoring your credit through Credit Karma or by other method is not a bad thing. Even if your number on Credit Karma is not identical to the credit score pulled by your lender, keeping an eye on your score will help you recognize trends and can help you improve your credit.
If you are monitoring your credit with hopes of buying a home to get away from your neighbor with all the wind chimes (do yourself a favor and watch that commercial) or any other reason; avoid surprises like a discrepancy in your credit score and get in touch with our mortgage bankers to see what options are available to you now or in the future, as your credit improves. There is no commitment needed for a conversation!