Why is my credit score different on credit karma
FICO Score vs Credit Score vs Credit Karma (Why Are My Credit Scores So Different?)
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Timecodes:
809 and 824
766 809 once again
789 759 and 776. why in the world do we
have so many different credit stores and
why do they vary from one to the next
this video will explain everything and
even answer the question of is the
Credit Karma score really a fake credit
score or fako score like so many people
had to call it we'll find out soon
enough here so let's begin we first have
to start with a myth and fully debunk it
and that myth is that you only have one
credit score however that is a
completely false misconception and the
reality is is that you have many credit
scores you heard that right and there
are many reasons for that too so let's
begin with the first one one of the
biggest reasons why you have so many
different credit scores is because there
are different credit reporting agencies
or cras for short also known as bureaus
we've got the Nationwide bureaus that
most people are familiar with like
Experian Transunion and Equifax we also
have alternative and supplementary
Bureau those like innovis lexisnetis and
others we have check and Bank screening
systems like chess systems there's also
employment screening tenant screen for
real estate and others as well on top of
that reason number two there are also
different credit scoring models out
there again the most familiar one to a
lot of people is the FICO score which
stands for fair Isaac Corporation by the
way there's also the Vantage store other
proprietary stores and there may be
other ones out they use in different
Industries as well so we've got our
credit reporting agencies here at the
top both big and small so our
transunions or equifaxes or Alexis
nexuses and other ones as well and those
are the big agencies that are reporting
data out doing all the data analytics on
the back end Etc and then with that data
they also have their different scoring
models so they might use the FICO model
or their Vantage store model and the
different variants of each one of those
to come up with those three digit scores
that we're also familiar with but wait
there's more reason number three is that
different credit score models also weigh
the individual credit factors
differently and they may look at
different ones or certain ones not at
all so here we've got the FICO score on
the left hand side with its five main
factors those are a payment history
amounts owed or in other words
utilization length of credit history
also called average length of credit
history new credit and credit mix and
each one of those has a basically goes
into a weighted average uh formula here
so it's 35 percent for payment history
30 15 10 and 10 for the other ones that
follow below that is to say that payment
history and amounts owed are the most
important factors making up your FICO
credit score overall those two factors
alone count for a 65 of your credit
score then on the right hand side we
have the advantage score which uses six
main factors and weights them according
to their own proprietary algorithm as
well they did not disclose the exact
percentages but they did rank them in
different orders so once again we have
payment history at the top which is
extremely important for your overall
score following that we have age and
type of credit which is a high impact
the percentage of credit limit used AKA
utilization again that's also a high
impact to your score then your total
balances and debt levels have a moderate
impact your recent behavior and number
of inquiries has less of an effect and
your available credit also has less of
an impact overall so naturally if you
have different story models each one
giving greater or less importance to
certain factors for the overall score
that will of course have to give
different outcomes at the end of their
equations reason number four different
credit scoring models may have different
scales or ranges again on the left we
have the FICO scores and they have two
different kind of subdivisions of those
stores the first one is called the base
score which is one that we all know very
well that one ranges from 300 at the low
end up to 850 at the high end the higher
the number the better the score but FICO
also issues industry specific stores and
I'll show you a few of those in a few
minutes here however those can range
from 250 up to 900. then we've got the
Vantage score on the right hand side and
there have been different iterations of
that over time from the first version to
the second third and now fourth the
first two iterations range from 501 at
the low end up to 990 on the high and
the more recent two go from 300 to 850
they're from making it much easier to
compare to a FICO score the Vantage
score by the way is the one that Credit
Karma uses so just because it's
different does not mean it's a faith
score or anything like that however it's
a lot less commonly used at least in the
credit card space so you don't
oftentimes see your credit report being
pulled via the advantage score lens so
to speak it's typically a FICO score but
nonetheless it's a good gauge of where
you happen to be and the overall Credit
World in other words is your credit
healthy okay or not doing so great and
which areas need work it can still be a
helpful gauge that help determine those
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month now let's take a look at reason
number five there are different credit
scores for different industries that is
you'll see different scores being used
for credit card lending versus Auto
lending versus mortgage lending So based
on the type a financial product for
which you're applying that can make a
big difference in terms of which report
and therefore which score gets used in
that decision making process so if you
were to pull up for example your
experience score and you see a 766 and
you're applying for a car or a house and
that experience score is like a 726 that
can actually still be okay and as you're
about to see here it gets actually
pretty complicated especially with FICO
stores here's the thing the FICO store
models can vary by industry and within
Industries and adding an additional
layer of complexity the data may be
sourced by different bureaus let's start
with the FICO stores using the credit
decision making process there on the
left hand side of your screen we can see
the FICO bank card store
98543n2 and they are a source Again by
different uh cras or bureaus so the
first two there at the top uh bank card
store nine and eight are sourced from
all three major bureaus then if the
lender wants to use FICO bank card score
five that one's via Equifax FICO bank
card score number four comes via
Transunion and then both three and two
there at the bottom are via Experian
then if you're going into the car buying
process we also have FICO scores
specific for the Auto industry uh the
top two FICO Auto score is nine and
eight again come from all three major
bureaus FICO Auto store 5 comes via
TransUnion FICO Auto store 4 comes via
Equifax and FICO Auto store 2 comes via
Experian are you still with me out there
and finally if you go into the house
buying process phyto also makes industry
specific scores for mortgages we've got
the FICO store 5 Via Equifax the FICO
score 4 via Transunion and the FICO
score 2 via Experian also outline there
in the bottom in yellow we have some
newer releases that is the bank card
store 10 Auto store 10 and then the FICO
score 10 and 10 T models and if you add
all those up it amounts to something
like 18 different models just from 5 I
go alone so it's pretty crazy I know and
they did not all come up with these at
the same time this was done over many
many years as models were improved and
revised over time to ideally give
lenders more and more clarity to certain
areas of you know risk underwriting and
stuff like that to help Banks and other
lenders make more informed decisions
about whether they're going to extend
credit or other basically debt vehicles
to help finance things and a likely
reason why we have so many different
types of Industry specific scores and
models within each of those different
Industries is because if you're applying
for a credit card for a five thousand
dollar limit for example versus a car
that costs 15 or 20K versus a house
that's three or four hundred thousand or
more those types of different risk
levels uh and underwriting criteria are
very different all right let's move into
reasons seven and eight and we'll take
these two together another reason why
you have so many crazy different credit
stores is that lenders for example Banks
May be Paul from different bureaus in
different regions as an example of this
banked a might pull Experian in the west
coast and Transunion in the east coast
while Bank B might pull TransUnion in
all regions and bait C might pull two
bureaus That Vary it could be a pairing
of its spirit and Transunion or maybe
transient and Equifax or something like
that and then there's Capital One that
likes to pull all three bureaus every
time you apply for a credit card
furthermore reason number eight is that
lenders may choose to use different FICO
store models again we've got two
different things at hand here first of
all a bank might want to pull your
Experian credit report but then based on
that report and they might want to see
the FICO 8 store or the FICO 9 score
while another bank in a different area
might still want to see your fito 8 or
509 score but maybe they want to Source
their data from a different Bureau so if
you were to apply for a credit card from
Chase American Express Barclays Citibank
Bank of America Wells Fargo and discover
all on the same day all those different
banks might actually see a different
credit score and maybe using different
reports and no that was not a
recommendation to go apply for like
seven credit cards in one day reason
number nine some lenders may only report
to one or two cras or bureaus this can
cause certain accounts to appear on one
report and not on another resulting in
differences among your scores in fact if
we go way back in time to when the Apple
card was first released that Apple card
only reported to one Bureau at that time
just TransUnion nowadays it does report
to all three bureaus so there's no issue
anymore but it's just interesting to see
how that developed over time so if you
happen to get a credit card from a
smaller Credit Union or perhaps a local
Regional Bank or a personal loan again
from not a very well-known National
Institution there's a chance that it may
only report to one Bureau and if an
account only shows up on your Equifax
report it won't have any effect on your
TransUnion report because it wasn't
reported there therefore that will also
cause some variances in your credit
scores and our tenth and final reason
credit reports may get updated at
different times to illustrate this here
are six of my credit scores and these
are the same ones that you saw in the
intro to this video with a little more
context added starting on the left we
have my credit karma stories of 809 and
824. Credit Karma uses the Vantage score
3.0 model to generate both of the trans
unit and Equifax scores and it was last
updated on November 4th 2022. my
experience tour of 766 used the FICO 8
story Model with data provided by of
course Experian and it was last updated
on November 1st checking my store via
Amex which was 809 I noticed that it
used the Vantage score 3.0 model with
data provided by Transunion and it also
updated on November 4th 2022 so it made
sense why this store was identical to
the one provided by Credit Karma because
they were both updated at the same time
and also use the Vantage drawer 3.0
model and also have their data from
TransUnion moving on to my credit score
from Chase it also used the vanish
drawer 3.0 model however however unlike
Ms and Credit Karma Chase pulls their
data from Experian it was last updated
on November 1st with Wells Fargo my
story there was a 759 and they use the
509 scoring model with data pulled from
Experian it was last updated on October
22nd and last over there on the far
right my store from discover was a 776.
they used the FICO 8 scoring model and
pulled their data from TransUnion this
store was last updated on October 10th
so whether it's different credit
reporting agencies different scoring
models or different lenders choosing
which report and which model they want
to use to give you that credit card
house or car hopefully now it makes a
lot more sense why you might have dozens
of different credit scores one is not
necessarily better or worse or right or
wrong compared to another rather they
just represent different ways of
observing and rating your overall credit
situation and with all that said if you
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