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Is Credit Karma Accurate?

Dena Standley | January 25, 2024

Dena Standley
Legal Expert, Paralegal
Dena Standley, BA

Dena Standley is a seasoned paralegal with more than 20 years of experience in legal research and writing, having received a certification as a Legal Assistant/Paralegal from Southern Technical College.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: Keeping up with your credit score can be confusing because you can receive different scores from various sources. Credit Karma does not provide an actual FICO score but claims to be one of the top companies providing accurate scores.

Many people often question the accuracy of Credit Karma because they offer their services for free and assure you that the information they provide is accurate. The credit score you receive from Credit Karma comes directly from two of the three main consumer credit bureaus: Equifax and TransUnion.

Their website states that any credit information you receive reflects what has been reported in the two credit bureaus. But is that enough to establish that its scores are accurate? Probably not. That’s why SoloSuit seeks to explain more about Credit Karma and what it does, compare their VantageScore with FICO score, and explain why your credit score differs from other sources.

What is Credit Karma?

Credit Karma is a financial technology company founded in 2007 that offers various services to assist consumers in improving their credit scores. They also help their members better manage their money using financial software such as QuickBooks, TurboTax, and Mint.Com.

However, Credit Karma is primarily known for offering free credit reports and scores. The catch is that you must sign up for these services and provide personal information. Their BBB profile reflects a poor customer review of 1.15 and an F rating. Their contact information is as follows:

How Credit Karma works

To access information from Credit Karma, you must give them your full name and the last four digits of your Social Security number. Next, they request permission to access your credit report from TransUnion and Equifax, and then they compile a VantageScore. A VantageScore is a unique credit scoring model that analyzes your past and current credit data and calculates your creditworthiness using this information.

Comparing Credit Karma’s VantageScore Vs. FICO score

VantageScore and FICO calculate your credit rating based on your payment history and spending habits. However, FICO is well-known because it has been in business for 34 years. Since they are separate entities, you will inevitably get a variation of the credit score, but it shouldn't be too different. The following table further shows the differences between VantageScore and the FICO scoring method.

Credit Karma may be a tool consumers can use to help track the health of their credit, but it is not always accurate. Most importantly, the Federal Trade Commission (FTC) investigated reports of Credit Karma misusing consumer information to tout “pre-approval” for third-party financial products. Not all of these consumers were pre-approved, and as a result, would incur a “hard pull” on their credit report when applying.

In January 2023, the FTC reached a settlement with Credit Karma and impacted consumers were eligible for some compensation.

Your credit score from Credit Karma may differ from other scores

Since Credit Karma gets their scores directly from Equifax and TransUnion, any difference you experience may stem from errors reported in these credit bureaus. The three main credit bureaus may also have differing information about your credit history. Other reasons you may receive different scores are:

  • Some creditors may not report to all three credit bureaus or delay reporting the information to any credit bureau.
  • Credit Karma does not factor in the credit bureau Experian.
  • Errors stemming from one credit bureau adding or missing some vital information that significantly affects your credit score.
  • The credit scores from other sources use different scoring models that factor in other aspects more heavily than Credit Karma’s VantageScore.

Let's use an example to illustrate the above difference:

Example: Ted had been working on his credit score for the last five years and wanted to get it to 700 and above. He paid off his car loan and mortgage and requested that the three credit bureaus remove a wrongfully reported debt from his credit report. Afterward, Ted logged into VantageScore and saw his credit score was 570. This score was significantly different because the last time he checked his FICO score, it was 655. Ted contacted Credit Karma and was told to review his credit report by TransUnion and Equifax. Upon checking, he noticed that TransUnion had not removed the wrongful debt. He then used Credit Karma’s Direct Dispute Feature to report the error, and the information was updated within two weeks.


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