Many people looking to buy a Boston home will need to know their credit score and “how accurate is Credit Karma?” is one of the more common questions we receive.
Below we will give you an in-depth overview of what Credit Karma is, how accurate Credit Karma is, and how often Credit Karma updates.
Let’s dive in so we can understand how accurate Credit Karma is:
What is Credit Karma?
Credit Karma is a free credit monitoring service. Credit Karma allows consumers to track their credit scores, learn about credit, and sign up for credit alerts.
Credit Karma makes money by selling advertising and allowing consumers to use its free service. Credit Karma does a great job of helping consumers learn about what impacts their credit scores as well. What helps keep Credit Karma a free service is countless advertisements that consumers can sign up for. So how accurate can a free credit monitoring service like Credit Karma really be? Let’s take a look under the hood.
How Accurate is Credit Karma?
Credit Karma scores are directly reported by two of the three credit agencies and are as accurate as someone can expect from a free credit monitoring service. More often than not, the accuracy of credit karma scores is in the right wheelhouse. The scores are not perfect and sometimes they can truly be way off so don’t rely on Credit Karma. Instead, if you’re buying a home or vehicle allow your credit report to be run by your financier and see for yourself where you stand. Some of the credit agencies will give you a free report as well.
While Credit Karmas scores may not be totally accurate they do allow one to track their progress and any changes to one’s credit. This is the best use case for Credit Karma, to track which way your scores are moving and to get alerts on things that may be happening with your credit score. Credit Karma has saved a number of people from identity theft.
Credit Karma is accurate enough that they can keep consumers coming back. As the company has continued to grow the scores have become more and more trustworthy.
So is Credit Karma going to give you an accurate credit score? They should be pretty close. Here’s the reason:
“The scores and credit report information on Credit Karma comes from TransUnion and Equifax, two of the three major credit bureaus. We provide VantageScore credit scores independently from both credit bureaus. Credit Karma chose VantageScore because it’s a collaboration among all three major credit bureaus and is a transparent scoring model, which can help consumers better understand changes to their credit score” reports Bethy Hardeman of Credit Karma.
When you apply for a loan you may find the credit numbers are different from what Credit Karma reports – the scores should be somewhat close!
Credit Karma Vs. Actual Score
After asking ‘how accurate is credit karma?’ the next question is always, how does Credit Karma compare to my actual score of FICO Score? One of the best things about the Credit Karma service is that it generates the credit report straight from two of the top credit reporting agencies TransUnion and Equifax. Credit Karma and your actual score reported from TransUnion and Equifax will be very close, the number of points off won’t be much. Experian is the one credit Agency that does not report to Credit Karma and this is where your score’s largest inaccuracy will come from as it relates to your actual score or FICO score.
How many Points is Credit Karma Off?
Many people ask ‘how many points is credit karma off?’ and the answer varies for each individual case. Credit Karma receives information from two of the top three credit reporting agencies. This indicates that Credit Karma is likely off by the number of points as the lack of information they have from Experian, the third provider that does not report to Credit Karma. If you can figure out your Experian credit score you will be able to generate an accurate detailing of how many points Credit Karma is off as it relates to your actual score.
Before you start your home search for a Boston condo, here are eleven credit report myths you should be aware of:
Paying my debts will make my credit report instantly pristine
Credit counseling always destroys my credit score
Canceling credit cards boosts my score
Too many inquiries hurt my score
Checking my own credit report harms my standing
FICO scores are locked in for six months
I don’t need to check my credit report if I pay my bills on time
All credit reports are the same
A divorce decree automatically severs joint accounts
Bad news comes off in seven years
I can always pay someone to fix or repair my credit