Follow those free online credit scores at your own financial peril. Such scores are different from the lender’s FICO® scores and can cost you lots of money.
The BIG Problem Credit Karma Does Not Want You To Know
Credit Karma tells everyone to get their free Credit Karma ‘Vantage’ credit scores. You think that is good. Actually, it is not. All mortgage lenders require Classic FICO® credit scores for their loan approvals, which also determine your interest rates and loan fees. Vantage Scores do not give the same precise scores mortgage lenders require from the Classic FICO Scores. That is where the problem with Credit Karma starts.
Credit Karma tells everyone to get their free Credit Karma credit scores. You think that is good. Actually, it is not.
All mortgage lenders and most auto lenders require Classic FICO® scores. Credit Karma provides “Vantage” scores based on a different scoring program. All mortgage lenders (and most auto lenders) require Classic FICO Credit Scores that follow precise guidelines for loan approval, determine your interest rates and loan fees – all from the Classic FICO scores. Vantage Scores do not give the same precise numbers lenders require from the Classic FICO Scores. That is where the problem with Credit Karma starts.
Credit Karma Misinformation
Credit Karma states in its Terms and Conditions, “We provide you with free credit reports and scores from two major credit bureaus…” – from Equifax and TransUnion. They provide their own credit scores, that are often considerably different from your lender’s FICO Classic credit scores.
In a survey at a university class, several students went to Credit Karma and requested their “Vantage Credit Scores” and then they requested their Lender’s Classic FICO Scores. Here are the results:
| Name | Credit Karma | FICO Classic Credit Scores | Difference | Change in $350,000 Mortgage |
|---|---|---|---|---|
| Curtis | 729 | 682 | – 47 | $137 Higher Mortgage Payment |
| Shannon | 698 | 720 | + 22 | $137 Lower Mortgage Payment |
| Spencer | 750 | 777 | + 27 | $41 Lower Mortgage Payment |
| Breylin | 739 | 703 | – 36 | $52 Higher Mortgage Payment |
| Jordan | 816 | 703 | – 113 | $149 Higher Mortgage Payment |
30 year fixed, minimum down payment.
*Read the entire article at https://mycreditplan.org/Blog/the-big-problem-credit-karma-does-not-want-you-to-know
To get more information on receiving discounted fees on monitoring, counseling and maintaining your credit in preparation to purchase a home. Contact us at 801-850-9489.