Is Credit Karma just a waste of time?

[Dervrak]

I keep an account at Credit Karma because, well why not, it's free. But whatever scoring system they use seems to be so detached from reality as to be useless. My scores vary wildly from my much more accurate "myFICO" scores sometimes as much as 60 points! Information wise, all the information they are pulling from my credit report seems accurate, but for instance they currently have my Equifax score as 708

where it is 763 on my myFICO report. Also their "scores" seem ridiculously hurky-jerky jumping up and down by large amounts every couple days. For instance, last Wednesday my Equifax score supposedly jumped 18 points because....wait for it....I made my monthly auto and mortgage payment! (at least that's what it had listed under the, why did my score change explanation) And today it just dropped 12 points because a $584 auto-charge hit my USSA card for my six month car insurance payment (bare in mind I have 90,000 in open credit with a 6% usage so this charge would have increased my usage roughly 0.7%). 

[Anonymous]

CK is great for watching your TU and EQ reports for changes and anomalies. Disregard their scores for anything other than amusement though. They use VantageScore 3.0 scoring algorithms which are different than FICO and are used by essentially no one for purposes of granting credit.

[Anonymous]

No, Credit Karma is not a waste of time.  First, its useful in keeping track of your TU and EQ credit reports.  Second, even though the scores used are based on the VantageScore 3.0 scoring model, you want to pay attention to the trend in scores over time, not the week to week fluctuations.  

What I've noticed is that with thin files and rebuilders, VantageScore 3.0 scores tend to vary significantly from FICO 8 scores.  But as your credit file thickens and matures, your VS3.0 scores start to converge towards FICO 8 scores although they would probably never be the same.  FICO 8 is no more "accurate" than VantageScore 3.0; they use the same inputs but weigh certain factors differently.  The advantage that FICO possesses is that it is the dominant scoring model in the market, primarily because Fannie Mae and Freddie Mac imposed the requirement for FICO scores during the mortgage underwriting process.

Fannie and Freedie requires mortgage lenders to use Equifax Beacon 5.0, Experian FICO V2, and TransUnion FICO Classic 04 scores. Since most mortgages are eventually sold to, or securitized by those two government sponsored enterprises, FICO scores became the default scoring model for most lenders.

[Anonymous]

I agree that CK is not a waste of time.  I get alerts regularly from CK, most of the time sooner than myFico.  I will say that I dont pay much attention to the actual score.  Example of why is that I am practicing AZEO right now.  Doing this boosted my FICO 8 by approx 13 - 14 points.  When viewing the AZEO results on CK, my scores actually went down by 5 points.  Again, as a monitoring service & review of accounts CK is not bad.

[SouthJamaica]

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@Anonymous wrote:

I agree that CK is not a waste of time.  I get alerts regularly from CK, most of the time sooner than myFico.  I will say that I dont pay much attention to the actual score.  Example of why is that I am practicing AZEO right now.  Doing this boosted my FICO 8 by approx 13 - 14 points.  When viewing the AZEO results on CK, my scores actually went down by 5 points.  Again, as a monitoring service & review of accounts CK is not bad.

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I recognize that it does update TU & EQ reports on a weekly basis, but to tell you the truth, I do find it a waste of time.

[Anonymous]

+1 for what @Maizeandblue said.

I've found that my VS3 scores didn't react at all to an SSL/'credit builder' loan falling below 9% utilization (42.35 remaining on $500).

FICO 8 scores went up just as expected from reading observations on the forums.

So, on New Year's Eve, with 1 open account (SSL) and without any revolving accounts reporting yet, I had a TU 8 score of 728 and a TU VS3 score of 629. So almost 100pts difference, and my credit file was clean from the start at 1 year 1 month old.

Today, 8 months later, the two scores are exactly the same - 742.

I think this is because I only have 2 revolving accounts at AZEO with a very low balance ($35) and no auto, personal, or mortgage loans open.

[Anonymous]

Those incidents you are discribing are changing your FICO too. You just do not see them because you are getting a monthly FICO score update vs a weekly Vantage Score update. Which thankfully FICO does not offer because it will be one more think to obsess over. The weekly fluctuations of any score is rarely anything to be concerned about. Use the service for its benefits. You get access to your credit reports on weekly basis for free. Something that did not exist before CK came along.

If you prefer to access your reports without the  anxiety of a fluctuating score, check out TrueIdentity.com. It is a TransUnion site. You can get a fresh TransUnion report every single day for free. No trials or anything like that. Also no score.

[Anonymous]

9 times out of 10 any time a CK discussion comes up on this forum and someone asks if it's worth using, the first thing you'll be told is that you should ignore the scores they provide.  I agree that ignoring the scores along with their fluff summary software charts/graphs is definitely the way to go.

[NeverGivinUp]

Glad to have read this. Just got an Alert from CK on my husband's score that EQ dropped 32 pts.! Checked the "What's Changed". Showed 2 Cards increased Balance & 2 Cards decreased Balance (both within $5). The only other change was the addition of 2 Amex Cards. Given the additional Credit Limits, seems it should have increased ?|?| No changes yet showing on FICO scores. Still, SCARY!!

[Anonymous]

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@NeverGivinUp wrote:

Glad to have read this. Just got an Alert from CK on my husband's score that EQ dropped 32 pts.!

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Yup, nothing to worry about at all.  If his Fico scores dropped 32 points it would be worth sweating, but not a VS 3.0 drop.