Home Credit Cards Credit Karma Isn’t The Only One Making Up Credit Scores. Banks Do The Same Thing

Credit Karma Isn’t The Only One Making Up Credit Scores. Banks Do The Same Thing

by joeheg

The Twitterverse just learned that the credit score provided by online service Credit Karma isn’t the same score that banks use when evaluating your creditworthiness. As is often the case on Twitter, many replies came in the form of a meme.

What is wrong with Credit Karma’s scores? The short answer is that they use a different scoring system to show your “score” than the one over 90% of banks use. So the number you see online isn’t the one they see when they pull your credit.

The Details

Credit Karma shows a credit score called your VantageScore. The number is computed using data from both TransUnion and Equifax, two of the big three credit report agencies. The confusion is that when a bank looks at your credit score they’ll usually get your FICO score. Different companies run FICO and VantageScore and FICO is the dominant player in the market.

Is Credit Karma lying by showing you the VantageScore? No, they’re not. It’s a real score computed by a real agency that sells it to whoever wants to buy it.  It’s just not the number that the banks use for whatever reason (accuracy, ability to predict creditworthiness, etc.)

Here’s the kicker, though. Credit Karma isn’t the only one pushing VantageScore numbers to customers. Many of the major banks do the same thing.

Where can you get a dependable credit score?

Getting your credit score used to be difficult. Heck, the credit report agencies had to be forced by the government to let you look at what information they had on file about you. When they had to give up that info, they started letting you see your credit score, for a small additional fee. It was worth it if you were looking to get a car loan or a mortgage and you knew your score before talking to a loan agent.

Eventually, the banks, who were already paying to get their customers’ credit scores, found out that offering a customer their credit score could be a marketing point. Now, almost every one of the major banks offers to provide your credit score, sometimes as part of a total credit checkup and monitoring service. Some banks offer this service to people who are not even current customers.

But which score do banks provide and are they any better than Credit Karma?

The Good

Several Banks provide you with your FICO score. This is the same one they’ll use when deciding if they want to approve your application for a new credit card.

  • Citi – FICO based on your Equifax report – credit score available from your account home page with 1-click.
  • Discover – FICO based on TransUnion report – available to cardholders and non-members.
  • Barclays – FICO based on TransUnion report – available to cardholders from account home page with 1-click.
  • Bank of America – FICO based on TransUnion report – available to cardholders

The Bad

Two of the biggest credit card issuers provide a suite of credit monitoring services to customers and non-customers alike. Included as part of these services is access to a credit score.

Chase offers a service called Credit Journey. You need to actively enroll in the service, which isn’t very hard. After signing up, you’ll get to see your score. Your VantageScore 3.0 based on your Experian credit report.

That’s right; Chase shows you the same data you’ll get from Credit Karma, not the FICO data they’ll use when reviewing your application.

American Express is no better.

They offer the MyCredit service for which you also have to enroll. Once logged in, you have access to your VantageScore 3.0 based on your TransUnion credit report.

Capital One offers a service they call CreditWise for free to everyone. They’ll show you your VantageScore 3.0 from TransUnion.

US Bank also provides VantageScore 3.0 to customers. However, they’re right up front about how the score they provide is not the number they use to make credit decisions.

The VantageScore is a general indication of your credit health. U.S. Bank does not use your VantageScore to make credit decisions.

Final Thoughts

If you want to get your FICO score, check with Citi, Barclays, or Bank of America if you’re a customer, or look to Discover, which provides the data to anyone who asks.

If you want a credit score that doesn’t mean much, go to any other banks or keep looking at Credit Karma. Just don’t be surprised when you get this reaction when you go to get that new car.

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This post first appeared on Your Mileage May Vary

1 comment

Marshall January 29, 2021 - 1:47 pm

Bank of America just recently changed their credit score provider because my credit score just shot up this month. Bank of America score until last month was always about 40 points lower than the average credit score. Now their score is up towards the top.

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