Scores don't make sense to me

[Anonymous]

Hi, I'm brand new to the forum.  My kids are in their early 20's.  I am helping them understand budgeting, credit, etc.  They have extremely close profiles on Credit Karma.  Both their Equifax and Transunion.  For instance, on Equifax my daughter has 0 hard inquiries, 3 total accounts, Age of history is 2 years, 3 months, 0 derogatory reports, 100% payment history and 0% utilization.  My son has 1 hard inquiry, 4 total accounts, 2 yr. age history, 0 derogatory reports, 100% payments and 5% utilization.  I realize that my son has a little less history, more utilization (geez, only 5% and 1 hard inquiry), but I'm confused because my daughters score is routinely 50 to 80 points higher.  Why would this be?

THX,

Paul 

[Anonymous]

Since you only referenced Credit Karma above, I'm assuming that's your source for the scores.  Is that correct?

If so, that's your problem... you're looking at irrelevant scores.  CK scores are not FICO scores, which are the scores that matter.  In order to get your hands on a free FICO score, have them head to creditscore.com or creditscorecard.com and they'll have a genuine EX FICO 8 score.  That's a meaningful/relevant scoring model and a score that major lenders (like Amex for example) would use.  You can then compare their EX FICO 8 scores and their profile data that goes along with them to see the variance.

[Anonymous]

What BBS said about scores aside, what type of accounts does each have? Are they all CCs or installment loans like student or car loans?

Also, by 0% utilization in your daughter's profile, do you mean $0 balance across all CCs or 0% because Credit Karma rounded down? This is important because if she truly reported $0 in all CCs, it actually hurts her scores (FICO scores not Credit Karma scores).

[Anonymous]

Nice observations by the other folks.  Another important point: you say that both of your kids have "100%" on Karma's "payment history" metric.  That front-end "summary" page of Karma's is notorious for describing a person as having 100% perfect payments when he or she has in fact one or more lates.

An essential step for your son is to go through his credit reports account by account and carefully look to see if there might be one that had a late payment somewhere.  Look at each month for the history of each account.  Karma's reports are reliable, though the summary page is not.

Once your kids have exactly one card reporting a small positive balance (with all other cards at $0) they should head over to Credit Check Total and use their $1 trial to grab all three FICO 8 scores.  That will come with a 3B report which the two kids can use to double check to make sure that they have no lates.  CCT will also tell them what their true Average Age of Accounts is and Age of Oldest Account.  Karma usually gives incorrect readings on those for anyone who has closed accounts.

[Anonymous]

Also as an aside, welcome to the forum, Paul.  Nice job talking to your kids early on regarding credit and its importance.

[RonM21]

Welcome to the forums paulros624! One thing that I wanted to add to what BBS said, is that because CK does not use true Fico 8 scores, you want to only use them to compare info on your reports. I wouldn't recommend taking their "recommendations" too seriously either. But they are good to use for looking at your updated TU and EQ reports.

[Anonymous]

PS.  Just an FYI... the moderators here advise against people disclosing their first or last names on the forum.  That's just to protect people against identity thieves.

Second the welcome to the OP!

[Anonymous]

THX!  Her balance is zero but that's because we pay it off.  She only uses 1 cc and charges about $200/month.  Her accts are credit cards.  Son has 1 student loan.  THX to everyone for your help and greetings!

[Anonymous]

THX!  In this case, I know for sure that they are 100% paid on time, because I pay them.   Both kids are in school and still mainly on the family payroll.  :-)

[Anonymous]

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@Anonymous wrote:

THX!  Her balance is zero but that's because we pay it off.  She only uses 1 cc and charges about $200/month.  Her accts are credit cards.  Son has 1 student loan.  THX to everyone for your help and greetings!

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Is her balance $0 because you paid it off after statement cuts by due date or is the statement balance $0 because you paid the charges off before the statement date? If it's the latter, meaning statement is reporting $0 balance, then she is getting dinged for about 15-20 FICO points due to "all cards reporting $0. She will regain those points by letting balance report to the card she is using then pay it off by due date.

I suspect your son's actual FICO score might be higher than your daughter's because of having an installment loan, credit mix, with all else being fairly equal. I strongly suggest stop relying on CK scores (VantageScore 3.0) for evaluation of their profiles, it's at best misleading and just about no lenders use it for credit decisions.