topic Re: Why is my Credit Karma Score much lower than FICO Score? in General Credit Topics

Why is my Credit Karma Score much lower than FICO Score?

Anonymous — Tue, 07 May 2019 05:08:14 GMT

I signed up for that $1 promotional 3 Bureaus report from www.creditchecktotal.com, an Experian company. My scores are 850, 850 and 840 for Experian, Equifax and TransUnion, respectively. These are FICO 8 scores.

On Credit Karma, my score are 797 and 806 for TransUnion and Equifax, respectively.

My question is why is there a huge discrepancy between these two scores?

Edit:

I am preparing on a student loan refinance with my credit union. Their best rate requires an Equifax score of 825 but not really sure which score they use. Once of their customer service rep said they use Vantage (same with Credit Karma), but not sure which version. I have 4 inquiries falling off in a month. I plan on refinancing then. Should I bbe confident with my FICO 8 score or Credit Karma Scoring?

Re: Why is my Credit Karma Score much lower than FICO Score?

Revelate — Tue, 07 May 2019 08:22:43 GMT

Vantage score is mostly useless: it is especially unlikely that any CU uses it TBH.

Also 825 sounds absurdly high for a non industry option or some other score out of 900... I suppose VS 2.0 suffices that and the CSR’s claim.

Re: Why is my Credit Karma Score much lower than FICO Score?

KLEXH25 — Tue, 07 May 2019 11:00:50 GMT

First of all, you have great scores!! Congratulations!

As for why there’s such a discrepancy between Vantage and FICO, it’s because they use different formulas, so various factors are weighed differently. It’s also why there’s a discrepancy between FICO scores of different types, such as FICO 2 vs FICO 8 (etc). One model might be more forgiving of one factor, compared to another. I don’t think anyone here has really taken the time to learn what Vantage scores value because most of the time, lenders use FICO, but I guess your CU is the exception. Can you ask someone else at your CU the same question to see if you get the same answer? Is there a big rate difference between the top tier and the next?

Re: Why is my Credit Karma Score much lower than FICO Score?

KLEXH25 — Tue, 07 May 2019 12:07:14 GMT

Also wanted to add that CK doesn’t seem to like balances / high utilization. I put a large charge on my Discover card and my FICO 8 dropped 20 points (Fico 2 dropped 30 pts). Just checked Credit Karma and it dropped 67 POINTS. Looks like CK is more balance / utilization sensitive. For perspective, the card was 66% utilization and total aggregate was 10.4% utilization (I already paid it off).

When my balances were all $0 across the board 2-3 weeks ago, my Vantage scores all went up, while FICO went down.

Re: Why is my Credit Karma Score much lower than FICO Score?

Anonymous — Tue, 07 May 2019 12:20:04 GMT

CK uses VS 3.0 and I'm quite sure that your lender doesn't. Contact the lender and get someone on the phone that knows their stuff and ask them two questions. First, which scoring model (and bureau data) they use and second, what the lowest score is from that model that's needed for their best rate. I agree with the others that 825 sounds way too high, regardless of scoring model. Unless the lender says they use VS 3.0, there's no reason to sweat those scores. Also, the highest scores I've ever seen reported from VS 3.0 (from people with 850 FICO scores) are in the 835-840 range; expecting someone to have a score within 10-15 points of that for a "best rate" is unrealistic.

Re: Why is my Credit Karma Score much lower than FICO Score?

KLEXH25 — Tue, 07 May 2019 13:36:19 GMT

I definitely agree that the CU's score requirement of 825 sounds way too high. Your scores are more than optimal already. I would definitely verify this information with a few different people at your CU.

On a different note, I found this post comparing FICO & Vantage score factors:

https://www.experian.com/blogs/ask-experian/credit-education/score-basics/what-is-a-good-credit-score/

Re: Why is my Credit Karma Score much lower than FICO Score?

alma_socal — Wed, 08 May 2019 12:49:57 GMT

Hi all!

Just thought I'd add a data point to this thread, since the use of Vantagescore is discussed.

My credit union is American Airlines Federal Credit Union, and they now DO use Vantagescore for credit card pulls at least.

It's the only one I've come across so far that uses Vantagescore, but I was surprised when I called for a CL on my Visa with them and they pulled Vantagescore.

So, at least for me, Vantagescore is not entirely useless as far as my Credit Union goes.

For reference, my FICO 8s are 738-781 and my Vantagescore was 730 when they pulled it.

Re: Why is my Credit Karma Score much lower than FICO Score?

KJinNC — Wed, 08 May 2019 13:47:30 GMT

An example of difference that I have encountered:

I have a 2016 charge-off of $92 (surprise! Blindsided by it this year when checking credit)

I paid it off about six weeks ago

It no longer counts on VantageScore, but does count on FICO. So in my case, I could expect a lower FICO than VS.

However, if it was a collection instead of a charge-off, it would have never counted against FICO (they disregard collections under $100), but would have counted against VS until paid off. Keep in mind that if you have great credit, a single derogatory item can have a big impact. So for example, if you had one collection for $80, it might hurt your VS a lot and not affect your FICO at all.

It's just two different formulas that try to do basically similar things, but do it in different ways. Results are "probably" "usually" similar but in specific cases, could vary greatly.

Either way, your credit is way ahead of mine! Good luck!

Re: Why is my Credit Karma Score much lower than FICO Score?

Anonymous — Wed, 08 May 2019 17:54:43 GMT

@KLEXH25 wrote:
Also wanted to add that CK doesn’t seem to like balances / high utilization.... aggregate was 10.4% utilization

I posted in another thread here about my score dropping when I paid off a card and went from ~15% to ~10.4%. There's something really weird about being 10% to 12% that tanks your CK (VantageScore3) scores. So it's not just "high" utilization.

Re: Why is my Credit Karma Score much lower than FICO Score?

Revelate — Wed, 08 May 2019 18:28:37 GMT

@alma_socal did it explicitly state Vantage on the score disclosure or did it just happen to match score wise?

I got a VS disclosure from Chase back in the day (1/2013 to be precise) but we haven’t had many other explicit disclosures to my knowledge.

Re: Why is my Credit Karma Score much lower than FICO Score?

KLEXH25 — Wed, 08 May 2019 20:38:29 GMT

@Anonymous wrote:

@KLEXH25 wrote:
Also wanted to add that CK doesn’t seem to like balances / high utilization.... aggregate was 10.4% utilization

I posted in another thread here about my score dropping when I paid off a card and went from ~15% to ~10.4%. There's something really weird about being 10% to 12% that tanks your CK (VantageScore3) scores. So it's not just "high" utilization.

So weird! Not that I give a crap about VantageScores, but I was shocked at the 67 point drop. So glad that wasn't my FICO!

Re: Why is my Credit Karma Score much lower than FICO Score?

Andypanda — Wed, 08 May 2019 23:52:07 GMT

Not that it matters but my vs scores are higher (29 points tu, and 37 eq) than fico.

Re: Why is my Credit Karma Score much lower than FICO Score?

Anonymous — Thu, 09 May 2019 02:58:26 GMT

VS 3.0 and FICO scores should not be compared. It really is like comparing apples to oranges. Think of it like comparing 2 different cars. It would be like someone saying "I don't understand why my Corvette is fast, but my Prius isn't."

Re: Why is my Credit Karma Score much lower than FICO Score?

alma_socal — Thu, 09 May 2019 04:02:03 GMT

@Revelate I asked the rep on the phone which one he’d pulled because I thought they pulled Transunion and the 730 he gave me didn’t match what I was seeing on my Transunion account (760-something at the time)

Then he specifically told me they pulled VantageScore, not FICO, and it was a hard pull on my CR.

They did give me a 10K CLI but I was super surprised.

The “free score” available in my credit union online account is the VantageScore based on Transunion info, so I checked there and sure enough it was 730.

Re: Why is my Credit Karma Score much lower than FICO Score?

Anonymous — Fri, 10 May 2019 03:25:12 GMT

@alma_socal wrote:

Then he specifically told me they pulled VantageScore, not FICO, and it was a hard pull on my CR.

The “free score” available in my credit union online account is the VantageScore based on Transunion info, so I checked there and sure enough it was 730.

Looks like we found one of the rare 1% that uses VS 3.0 in lending decisions. I'll remember that. American Airlines FCU.

As an aside though in reference to your final sentence above, keep in mind that there are plenty of accounts that provide a free VS 3.0 score (because it's cheap to do so) but the lender doesn't actually use that score for any lending decision.