Credit Karma is one of the biggest credit score services that is free of charge and has more than 100 million members. It offers users an opportunity to view their credit scores and credit reports from TransUnion and Equifax for free.
Overall, Credit Karma credit scores and reports are relatively accurate, though not always up to date. But there is something essential to know about the reliability and some exclusions of the offered information on Credit Karma.
Credit Ratings on Credit Karma
The credit scores given by Credit Karma are the VantageScore 3.0 credit scores. It is a credit scoring model developed by the three credit reporting agencies: Equifax, Experian, and TransUnion. It varies from 300 to 850, which is similar to the FICO scores that are widely used nowadays.
All in all, VantageScore credit scores are relatively similar to FICO scores for an average consumer. However they may vary a little depending on the situation with credit rating. The key reasons for differences between VantageScore and FICO include:The key reasons for differences between VantageScore and FICO include:
- The two models employ slightly different algorithms and formulas to arrive at credit scores.
- They may use credit information or give it more importance than the others.
- The VantageScores are more likely to give higher credit to recent credit behaviors.
And thus, for the majority of consumers, their VantageScore and FICO scores are normally around 20 to 30 points apart; however, it rarely means that the difference is not possible to be significantly higher. Nevertheless, in general, VantageScore is still helpful in portraying a broad picture of one’s creditworthiness.
Credit Reports on Credit Karma
TransUnion and Equifax credit reports are available at Credit Karma for free. These are more or less the same reports that lenders and creditors view when they check your credit file. Thus, the information should include all the credit accounts, balances, payment history, credit inquiries, etc.
However, it is important to note that there are in fact three consumer reporting agencies (CRAs) namely TransUnion, Equifax and Experian. Therefore, the Credit Karma reports will not contain all information from Experian. It will only display the credit history that TransUnion and Equifax have reported for you.
This means that anything that is exclusive to Experian like credit account details, inquiries, collection notices, etc., will not appear on Credit Karma. To see the complete credit profile from all three credit bureaus, it will be necessary to request the Experian credit reports one way or buy the three bureaus credit report.
Accuracy of the Scores and Reports
Since VantageScore is highly compatible with other scoring models popularly used, and with the rich credit data from two of the leading credit bureaus, The credit report you get from Credit Karma is as good as any other to give you a clear picture of your credit standing. It is also important to note that scores and reports generated are updated on a weekly basis in order to provide up-to-date data.
However, the VantageScore and TransUnion/Equifax-only data also has some limitations to be aware of:However, the VantageScore and TransUnion/Equifax-only data also has some limitations to be aware of:
- It may be different from other credit scores employed by other lenders
- It does not provide a complete picture for consumers with credit history only at Experian
- It takes some time for the new information or the information which has undergone a recent change to appear in the credit report.
Thus, while generally rather accurate and dependable for most consumers, Credit Karma does have certain amounts of accuracy and completeness issues. It is wise to check the site regularly, but given the fact that it is free, it is extremely beneficial in general to monitor your credit situation.
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