Are you familiar with Credit Karma? You’re more than likely a user; in fact, there are more than 80 million members!
Credit Karma calculates a credit score using the Vantage 3.0 model; it’s important to note that there are a several different scoring models. The most popular scoring model used is FICO (Fair Issac and Company). According to Forbes, more than 90% of top lenders use FICO scores to evaluate lending decisions.
I recently applied for a credit card and noticed a significant discrepancy between the score on my application and Credit Karma. Confused, I thought there might be an error on my credit report and researched the issue.
Upon further research, I noticed the credit card I applied for used the FICO model, while Credit Karma uses the Vantage 3.0 model. Using different scoring models can result in discrepancies. In addition, Credit Karma uses information from two out of the three major credit bureaus.
It’s often overlooked, but it’s critical to read the fine print, especially in the context of your money. As seen below, Credit Karma acknowledges that there are a multitude of scoring services available, and there can be discrepancies between scores.
Ultimately, Credit Karma provides an accurate measure of your credit health, but the scores that are being used to apply for a credit card can be different depending on the model a lender is using.