CREDIT KARMA SCORE VS ACTUAL SCORE FREE

FICO, conversely, requires at least six months of credit history and one account reported. VantageScore is more beneficial to consumers with a short credit history, as its scoring model only requires one month of activity and one account reported to the credit bureaus to create a score. Both end up with a score range of 300 to 850, but that’s where most of the similarities end.

VantageScore, on the other hand, uses consumer credit files in smaller sets to create its formula for scoring. However, these details are gathered in different ways.įICO bases its scoring on the credit reports of millions of consumers at a time, received directly from the three credit bureaus to create the most accurate scoring. However, there are differences between FICO and VantageScore that consumers should be aware of.įirst, it is important to understand that both the FICO and VantageScore methods draw from the same consumer information: payment history, credit usage, recent inquiries, length of credit, and type of credit. By partnering with the three credit bureaus, VantageScore is able to use similar information and scoring models as FICO to generate individual credit scores. In recent years, VantageScore has taken on the challenge of competing with FICO for its place at the top of the consumer credit scoring chain. Up until a decade ago, FICO was the only consumer credit score used by the three major credit reporting agencies, as well as the only score used by lenders and financial institutions.

The Fair Isaac Corporation introduced FICO credit scores for consumers back in 1989, and since then the company has worked diligently to keep up with consumer behaviors and how those impact the FICO scoring calculations. When most people think about their credit score, whether they know it or not, they are thinking about FICO. Given that the three credit reporting agencies all offer credit scores to individual consumers, missing the third may mean Credit Karma users are getting a slightly inaccurate picture of their credit profile. In addition to using a different type of credit score than most lenders and financial institutions, Credit Karma also offers access to only two credit scores from two of the credit reporting agencies.Ĭurrently, Credit Karma allows users to see their Equifax VantageScore 3.0 and their TransUnion VantageScore 3.0 – not a credit score of any kind from Experian. When Credit Karma users see their credit score details on the site or the mobile app, they are viewing their VantageScore 3.0.

The VantageScore 3.0 has the same credit score range as FICO and uses some of the same information a FICO Score does, but the way in which the information is used to determine one’s credit score is different.

CREDIT KARMA SCORE VS ACTUAL SCORE FREE

While Credit Karma boasts its free credit score to anyone who wants it, the company provides access to an individual’s VantageScore 3.0, not the FICO Score that the majority of lenders use to evaluate an individual. The higher the credit score, the more sound a borrower the individual is perceived to be when a new application for credit is submitted. Regardless of the type used, information like an individual’s account payment history, number of accounts open and used, credit utilization percentage, and any negative credit issues are all included in the calculation of one’s credit score.Īn in-depth algorithm is applied to these details to derive a three-digit number ranging from 300 to 850, in most cases. In the world of consumer credit, there are several different credit scores that may be used by creditors to evaluate the risk of a new borrower.

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Credit karma score vs actual score