Credit Karma, and do you trust it?

[Anonymous]

Hello, 

When I was younger, I got screwed over on a Sprint bill by my parents and when I lost my job I let a credit card go into collections. Now, both will drop off my reports next year and I am currently learning and trying to rebuild my credit. Currently, I use discover and credit karma. Recently, my scores jumped about 70-80 points on credit karma bringing me to 639 TU and 663EQ but my discover is yet to update (i have to check back feb 17 or 18th. I was just approved with for a secured credit card for Discover IT and I opened up a $500 limit. From what I read, having that open credit will help my 182% credit utilization drop. I put $70 on the card and just made the payment before the payment is due ( scheduled for March 5th I believe). I wanted to know if credit karma is a liable site to use or should I take it with a grain of salt? I have two current inquires on my credit that will drop within the next couple of months: a bank and discover? I feel that I should challenge them because I don't remember applying for them, but they're dropping off next month and April so is it worth challenging? I also challenged my sprint bill and when I recieved my feedback, it jumped my score from 587 to 663 for EQ. A few days prior, my TU already made the jump from 560-639. Just want some ideas on how to continue to rebuild my credit. 

[HeavenOhio]

Use Karma for its alerts and its handy credit reports.

Don't pay attention to the VantageScores it provides. Lenders don't use them.

Also, disregard its account age stats. Both FICO and VantageScore include closed accounts as part of one's account age numbers, but Credit Karma doesn't.

And be careful with how Karma computes utilization. FICO rounds all fractions up. Karma will round down. As an example, 0.25% utilization should round up to 1%. Karma will round it down to 0%.

[Anonymous]

NO!

     I look at CK as a really, REALLY, general guide; not designed for any accurate data. I think of it like this. If you live in the USA and want directions to Venezuela, CK would say “head south.” If you want accurate data, you need detailed accurate inputs. You live in California, then head southeast. You live in the US Virgin Islands, then head southwest. You live in Florida, head due south. But FICO goes even further. It asks, where to in Venezuela and from where in CA, USVI, or FL.

Y

[Anonymous]

I respectfully diagree with the above post.  I've never found any inaccurate data on the reports provided by CK relative to my real hard-copy credit reports.  I feel their data is just fine.

Their provided scores (VS 3.0) and fluff charts and graphs are what can be ignored, but IMO their report data is just fine.

[Anonymous]

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wrote:

NO!

     I look at CK as a really, REALLY, general guide; not designed for any accurate data. I think of it like this. If you live in the USA and want directions to Venezuela, CK would say “head south.” If you want accurate data, you need detailed accurate inputs. You live in California, then head southeast. You live in the US Virgin Islands, then head southwest. You live in Florida, head due south. But FICO goes even further. It asks, where to in Venezuela and from where in CA, USVI, or FL.

Y

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I also disagree with this. They are top notch in letting you know when a new account is applied for. And their list of your accounts is spot on. And four updates a month on that. It’s just their scores and average age of accounts that should be ignored. It has its use for two of the CRAs. 

[Anonymous]

      I knew this was a controversial topic when I responded. CK’s value is subjective and I completely agree with Benmarkley3 and BrutalBodyShots; however, I was responding to a new member who appeared to have little knowledge about the differences. From the myriad of posts on the forum (especially from new folks to the system) I saw that many gravitated to the score and asked; “Why are they different.”  The whole FICO/FAKO thread has tons of such questions. If data were drawn, I would surmise that the majority of members worry about their scores and not the underlying factors. If that supposition is correct, then the scores become important (to them). I personally (and believe you two also) feel the underlying factors are far more important. With that in mind, you are absolutely correct about CK. There is good stuff there and it has value (especially since it is free). However, for those new members, who are delving deeper and want to understand the nuances, I believe CK can do more harm than good.

     If your knowledge base is limited, I believe CK can lead one down a bad path. Then that requires “unlearning;” always a more difficult task than learning it right in the first place. For the user of CK’s data, the user must first understand the FICO system most lenders use, and then pick out the good stuff from CK. If you don’t know what parts are good, then the whole fish is dangerous (to me).

Y

[Anonymous]

tyzak,

I think all you needed to do was clarify what you were referring to when you said that CK doesn't provide accurate data.  Myself and the other poster above that disagreed with you assumed you meant credit report content, so presumably others would think the same thing.  I don't think CK is a bad tool for someone that's just starting out.  They simply need to be informed about a couple of things:

1 - The reports are great and contain accurate information.

2 - The scores provided are not FICO scores and should be ignored by all.

3 - The charts, graphs and any other fluff that go along with your membership should also be ignored.

In a nutshell, CK is only good for their TU & EQ reports, which get updated weekly.  As long as anyone, be it a newbie or veteran to the credit game understands those simple points, CK can be a positive tool.

[Anonymous]

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wrote:

      I knew this was a controversial topic when I responded. CK’s value is subjective and I completely agree with Benmarkley3 and BrutalBodyShots; however, I was responding to a new member who appeared to have little knowledge about the differences. From the myriad of posts on the forum (especially from new folks to the system) I saw that many gravitated to the score and asked; “Why are they different.”  The whole FICO/FAKO thread has tons of such questions. If data were drawn, I would surmise that the majority of members worry about their scores and not the underlying factors. If that supposition is correct, then the scores become important (to them). I personally (and believe you two also) feel the underlying factors are far more important. With that in mind, you are absolutely correct about CK. There is good stuff there and it has value (especially since it is free). However, for those new members, who are delving deeper and want to understand the nuances, I believe CK can do more harm than good.

     If your knowledge base is limited, I believe CK can lead one down a bad path. Then that requires “unlearning;” always a more difficult task than learning it right in the first place. For the user of CK’s data, the user must first understand the FICO system most lenders use, and then pick out the good stuff from CK. If you don’t know what parts are good, then the whole fish is dangerous (to me).

Y

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It takes one or two paragraphs to explain to a newbie what is good about credit karma and what is bad. While it’s true many new to the credit game don’t understand the different credit scores we all in here try to explain that. I think people are capable of understanding the good and bad about everything when explained. Many on here try to explain sites 

Ike credit karma and what they are good for. It is free. And that helps a lot. That with credit.com and you have three reports covered with basics for free. For the rest of the year when annualcreditreport.com isn’t available. The whole fish is dangerous says don’t use it at all to me. That’s just how I took it is all.