Submitted by CASTePhYRusIO t3_yhohgm in personalfinance
So recently wanted to start looking into buying a home with my significant other. They did a credit pull and some of the numbers don’t match up. My Equifax score when they pulled my credit in Credit Karma was 651, but in their blind pull was 573. Why was there a huge difference?
Ahh okay. Thank you for the insight on that.
>used some combination of FICO 2, 4 and/or 5.
curious what these all are and how they differ and why the need for so many variants?
Looks like each credit bureau got their own version.
>Once you get older than FICO 8, the naming of the FICO scores becomes a little inconsistent across credit bureaus. There is no FICO 7 or FICO 6, but there are FICO 5 and FICO 4 scores at Equifax, FICO 4 and FICO 98 scores at TransUnion, and FICO 3 and FICO 2 scores at Experian. And yes, all of those scores include the bankcard and auto loan variants.
Only difference I know if how charge cards are treated. FICO8 doesn't count them for utilization while older models use the highest reported balance as the credit limit. FICO9 made some derogatory remarks lose less points and going by OP's 80pt difference that's probably the case here.
No, its not different by bereau.
FICO is an independent company that creates credit scores algorithms, FICO 1,2,3,4 etc. Beureau's provide credit reports, and then sell the scores using their credit reports and the FICO algorithm. The algorithm used is determined by the lender when they purchase a score.
There are different score versions for two reasons.
(1) Different scores are better for different purposes. Some are used primarily for auto, others mortgages, other credit cards, etc. So lenders select what they want.
(2) Older scores are sunsetted, new ones are created that do a better job then older ones.
Vantage is an alternative algorithm developed by a consortium of beaureus because they are tired of paying FICO.
Bizarrely
Different models are supposed to predict different types of loan risk. Taking out q loan for an auto payment is viewed differently than say a credit card as the terms are a lot different, collateral, etc.
Here's what you and the other guy may not know, FICO isn't the in all be all either and many banks will even use their own model. Chase for example does this. VantageScore is still useful as it gives details about your overall credit make up. Missed payments, crediting utilization, age of credit, etc. It's all there.
You are allowed to pull your actual credit reports at least once a year completely free. As for scores with how many models it will just sort of depend. You can go on the FICO website and get a free estimate with proper info and/or Experian is free to check I believe at least once a week.
Vantage score is petty commonly used by lenders and credit card companies nowadays.
Source? Every application I've made has been FICO. I have literally never heard of anyone using VantageScore for lending decisions. I'm sure someone does, I just have actually seen an example.
In the US, this is untrue. CC companies do provide vantage scores on your statements though because it's cheap to do so. But in terms of credit decisions, FICO is used the majority of the time (there may be a handful of lenders that use vantage scores in credit decisions. MyFico forums would have this information).
Majority yes use FICO, but a large number of lenders use Vantage, especially in near prime lending, though not for everything.
Capone, Chase, Upstart all use it to an extent for example.
Credit Karma should be completely accurate for what it says it is: a Vantage score 3.
However, what it isn't is very useful: most lenders use a FICO scoring model, not Vantage. Mortgages especially basically have to use older FICO models: Mortgage scores used:
Edit: It sounds like in a few years FICO 10T and Vantage 4 will be used: https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-Validation-of-FICO10T-and-Vantage-Score4-for-FNM-FRE.aspx
Okay I getcha now. I’ll do some reading this next week. Thank you for the links.
Not only are Vantagescore and FICO different algorithms, but any given score algorithm may be “calibrated” differently, so the same apparent risk at 650 on one score is at a different number on another score.
The machine learning goal of the models is to rank-order customers by probability of future default by using information in the reports. That is the “predictiveness of the score” goal.
Next, the scores are transformed onto the scale that is actually observed and reported numerically, and there is arbitrary freedom here. Generally they are approximately linear in log risk odds, so that Score = A + B * log(non defaults/defaults). The A and B are arbitrary, and also change in an economic cycle (mostly A). Different calibration means different score for the same predicted risk (predicted ratio of good customers to default customers).
No reason that Vantagescore is calibrated the same as any FICO score, and different subversions may also be calibrated differently.
Please don't be a joint owner of a house when you're not married to the other owner. Consider having one person buy it and the other pay rent to contribute to the mortgage.
My good friend who works for a bank has told me a lot of sad stories that happened when the couple split up. Ruined credit scores, foreclosures.
Not trying to rain on your parade, but since this is personal finance, just suggesting an alternative method that has a lot less risk.
No I totally get it. Thank you for the concern.
I use Experian and my credit card's score to monitor my credit, though I also use credit karma, well cuz it's there. But I take it all with a grain of salt.
The score my credit card gives me is also Vantage Score 😶😶
Oh... Mine is Fico.
If you're looking to buy a home, check out first time homebuyers programs in your area. They'll give you free credit counseling and can give you a better idea of your score and a timeline to work on things if needed.
Thank you. I’m going to sit down next weekend when I have dedicated time and can do this.
Kredit Karma sent an alert to my phone that a hard inquiry had been run on my credit report the instant that it happened. Because of their quick action, I caught identity theft as it happened to me in real time. I think Kredit Karma is very accurate. I love ❤️ them.
They're great for credit event monitoring, but the score number provided is very limited in it's usefulness.
I had the opposite problem. They had my credit 100 points lower than the 3 credit bureaus. I waited way too long to buy a house because of it.
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Credit Karma is more for monitoring, erroneous information, identity theft, etc. Yeah their score is "ballpark" but it uses a different model than FICO does so discrepancies and differences are common. I would encourage everyone to use a free credit monitoring program like CK but also regularly request FICO scores that typically are provided for free from credit card companies to have a more complete view of your overall credit score.
Will do. Thank you for the tip
Transunion, Experian, Equifax. Our system selects the 2nd lowest score
I’m learning so much tonight.
Credit Scores are made up of 2 (semi) independent parts:
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When doing a credit application, lenders combine a reporting agency + model of their choice (or for mortgage purposes, they tend to have to use the combinations I linked above) then get that score to make their decision with. Because of bullet 2, you do not have a singular Equifax score or single Experian score.
Hey an accurate answer. nice.
Make on time payments, dispute anything that does not belong. Save for a down payment AND closing costs. Ask about down payment assistance grants or certificates.
Will do. Thanks.
Useful for getting a ballpark figure on your credit score. But it's not what a lender will use, and so the score the lender sees will be different.
Also, there is more to getting a loan or a credit card approval than just your score. Credit scores don't look at your income. They aren't based around how much you make or how consistently you make it or anything similar. But a lender will care.
In the case of a home loan, the credit scores are also not looking at your down-payment, but a lender will.
Ah okay. I’ll get myself educated before taking another crack at a home loan.
Myfico.com is not free but if you pay and dig around their site, you can find your "mortgage score" this is very close to what most lenders will pull. It's a good way to check out your progress on that particular scoring. Credit Karma is unfortunately not an accurate number for mortgage lending as others have explained above. Good luck to you!
You are fallen into the trap of thinking YOU have a credit SCORE. its neither of those
SCORE: A score is NOT somthing you have. it something the lenders calculatre. there are tons different method from different companies. Taht has different versions and again have multiple sub catagories for different purpose. aka the one use for mortgage is not the same for a CC. t
Creditkarma uses vantaga. most bankes uses fico. so some difference in the results are going to be there and the go of transuinon an equifax. the bank might be using Experian.
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YOURS: its not yours. its the bank evaluation on you and they can add/remove any part of the scoring model like the want. even if you have a near perfect 820 with nothing bad on it nothing stops a bank for say.g "no more than 5 creditcard applications the last 2 years" (chase does this)
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So to sum it up. Your perception of what is going on is misleading you and you are asking the wrong question.
Creditkarmas score is 100% accurate. for the model they used on the agencies they use. is just not what you bank use.
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think of it this way, if you ask friend 1 about your new girl and ask friend 2 about your new girl. they are not going to say the same. it does not mean one is more inaccurate than the other
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The lender should inform you of what agency and scoring model they use.
Credit karma uses a vantage score and its basically worthless when applying for credit or a loan. Do not rely on them. Rely on the 3 (i repeat 3) credit reporting bureaus
>Rely on the 3 (i repeat 3) credit reporting bureaus
I believe even Equifax and TransUnion push Vantage Scores for their (at least free) accounts. Experian provides FICO 8 for their free account, but even that won't be much use for determining mortgage eligibility.
Or any credit lines. Companies run credit reports.
Ignore Credit Karma's scores. They are useless.
They have their own scoring model - Vantage Score - that is not used by lenders.
Only FICO matters.
Gotcha. That’s what it seems like so far by other users.
Are you legally married? If not, only have ONE of you buy the house. Not a week goes by that we don't see a post like this. It's easy to add a person to a deed/mortgage later if/when you get legally married. Removing someone is not.
EDIT: anutha one
Will do.
The score you see in Credit Karma is basically just a guideline for you as a consumer.
When you apply for a loan, the lender will pull all of your "raw" data from the credit rating agencies it works with, and then it will run its own algorithms to determine if you meet their risk threshold.
I use 3 monitoring apps. Credit karma and experian and my capital one card. All3 are free. They update at different times and are slightly off. Experian is more accurate as that’s one of the 3 big scores that gets looked at. Experian is usually higher by about 5-10 pts than CK. It never hurts to use multiple tools to make sure you’re in a good spot.
I’ll do that.
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In my experience, not very. It was about 300 points lower than my actual credit score that was pulled from a home loan application.
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It's not very accurate. It's just to give you a ballpark number. When I went to buy a new to me car, I found out from the dealership that my score was actually 30 points higher than what credit karma said.
Credit karma did the same to me with numbers. They also claimed that I had 2 cards with one company which I don't, and that I was late on a payment with another which was also false.
There's something wrong with Credit Karma right now. This weekend my score went down by 70 Points and nothing changed. I posted on the credit subreddit and a couple other people said the same thing happened to them.
I checked my experience fico score and nothing changed, there was no drop.
Experian doesn't update at the same time, so the fact your Experian didn't change is meaningless.
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Personal attacks are not okay here. Please do not do this again.
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They responded in a polite way. If you disagree, we encourage you to post, but it must be in a polite way. Name calling is beneath you and this subreddit. It won't be tolerated.
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The difference between my credit karma and actual trans union score was ~50pts
Credit Karma does provide an actual TransUnion score: TransUnion Vantage 3. If you mean TransUnion FICO score, even there you don't have 1 of those, you have many.
I recently bought a car and was provided with a print out of my score that states “trans union” as the agency where the score was pulled from. On credit karma and my chase credit journey app my score is 745/760 but on this paper it says 811. This was last week.
TransUnion is a credit reporting agency. They provide the information that is used to fill out scoring models. So one of your many scores that uses TransUnion provided info was 811, but that is not your only TransUnion score.
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So you have different scores for:
That's all without looking at Experian or Equifax.
Wow what’s the point of all of that? In my uninformed opinion, that’s way too much. Either you’re a good borrower or not. A loan is a loan.
Finding a tiny edge for making differing types of loans means a lot more profit for lenders.
Credit scores aren't for you, they're for lenders. FICO and Vantage continually work to try and improve their models, as well as design ones for specific types of loans.
Credit karma is an Isaac score and most people talk about FICO scores (the big 3: equifax, transunion etc). so those are different things aka apples and oranges.
Other institutions use other scores really just depends on what your talking about or qualifying for.
I think you have your terminology reversed a bit, though you have the right idea.
Credit Karma gives a VantageScore, not an Isaac score. FICO is an Isaac score. (FICO is the abbreviation for Fair Isaac Corporation)
Mainly looking for house loans. Not trying to get more credit cards. 😂
A lot of explanations here but "very accurate" is the real answer. If credit karma says you have a 720 and you have money for a down payment, you're almost assuredly getting approved for a mortgage
Okay. I’m closeish. I just need to pay down some more on debts and I should be good.
Another thing you can do is just go to the bank and run a pre-qualification. You might be there already. Best of luck
I did a home loan check through NASB and they said I only qualified for 120k at most with my scores and how much I was willing to put down.
Not accurate at all. Was getting 690 scores from the 2 they show. Rental agency did a credit score inquiry and came up at 800. 🖕Credit Karma
which company did the inquiry come from?
Wow. Lol alright then. I’ll remember that.
Mysunsai t1_iuewjpg wrote
You do not have one definitive “credit score,” you have dozens of credit scores, which use dozens of different credit scoring models to take the information on your credit report and turn it into a number.
Credit karma gives you a vantagescore. They do that because nobody uses vantagescore, and so it’s very cheap to provide it to you. So the score credit karma gave you is 100% accurate, it’s just that nobody really cares about that particular score.
Your mortgage lender would have most likely used some combination of FICO 2, 4 and/or 5.
Credit cards usually use FICO 8, which is also somewhat commonly provided by credit monitoring services (though not credit karma). Auto loans usually use FICO Auto. There are a variety of other FICO scores that lenders might choose to use in different situations.