Credit Karma Credit Score Monitoring Service

I wrote a lengthy review of CreditKarma back in March. At that time, I thought I could use the free service to monitor my credit score because, though it isn’t really the FICO score, I can still use the relative changes to have an idea on how my credit score moves. Now, after six months, I have a little doubt about the usefulness of the program.

There are a few signs that make me come to this conclusion. First, my CreditKarma score almost didn’t change, only four points from March to September.

Credit Karma Credit Score

When I raised  the question to CreditKarma on Twitter, I was told that my score didn’t change because my credit is very stable. While I believe that’s the case, there are things happened in the last three months that could affect my score, though maybe only slightly. When I got my FICO score back in January, it was 792, but in June, the score dropped to 780. But the CreditKarma score didn’t change at all since April. But when I checked the Credit Report Card from CreditKarma, it showed that I had a hard credit inquiry recently, which I believe should have a negative impact on my score, but it’s not showing in the score.

Then the Credit Report Card, a new service from CreditKarma. It shows that I have an average credit length of 6 years and 5 months. However, the Equifax credit report I got early this month (I got a free credit report every four months from one of the three agencies) showed the average length as 7 years and 5 months. That’s a significant difference, though both reports have the oldest credit as 11 years and 8 months. My understanding is when credit score is calculated, the average credit history matters a lot as it accounts about 15% of the total score. If CreditKarma, or the credit agency it uses to provide the score, can’t get the credit length right, the score will very likely be wrong.

BTW, the Equifax report showed I have to hard pulls, all from real state agencies when I was searching a place to rent in August. CreditKarma reported only one.

Are you using Credit Karma too? Have you seen your score changed?

Update: A new website site, Credit Sesame, now offers free Experian credit score as well. See Credit Sesame review for details.

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11 Responses to “Credit Karma Credit Score Monitoring Service”

  1. Annie |  Sep 30, 2009 at 3:44 pm

    The same thing happened to me when I used Transunion’s credit monitoring service a little while back. For six straight months, my credit score didn’t budge even though I had made some financial moves that I knew would affect my score. When I compared it with similar tools, I found that my score had in fact changed and there must have been some sort of bug in Transunion’s system. I tried letting TU know several times – more of a heads up to them than for my sake – and never once got a response (I must have sent 3 or 4 emails).

    I believe Credit Karma uses Transunion for their credit data – Maybe CK is encountering similar issues because Transunion has a flaw in their system somewhere that they don’t seem to care to fix?

  2. Steve |  Sep 30, 2009 at 3:47 pm

    I’ve seen my credit score move around:

    http://www.ldc.upenn.edu/~sgrimes/temp/credit_score.jpg

    Over time period depicted, factors affecting my score: applied for 6-8 credit cards, paid off $12,000 in 0% balance transfer, took out $7000 in 0% BT, closed 2-3 cards. No missed payments.

  3. InTheIndustry |  Sep 30, 2009 at 10:39 pm

    A hard inquiry will usually only move your score a couple of points, and in some cases, it won’t move at all (or go up if now you’re reporting higher limits). It depends on what the bureau has on file for you. Keep in mind, too, that different credit bureaus have different data. Just because a hard inquiry was sent to Equifax, doesn’t mean it was sent to TransUnion. Likewise, your credit history will be recorded differently on each bureau. That’s not to say that Credit Karma isn’t having some issue on your particular account – if you know that from some other source, like TrueCredit, that TransUnion is recording inquiries and Credit Karma isn’t, then you should let them know about that – but comparing Experian, Equifax, and TransUnion to each other is not going to give you the result you’re looking for.

  4. Sun |  Oct 02, 2009 at 10:44 am

    @InTheIndustry Thanks for the information. I know what you are saying. Each credit agency uses their own formula developed in house to calculate their own score, with different weighting on each category, when they are not using FICO. However, I expect every formula cover roughly the same categories, such as credit history, payment history etc. Thus, it’s hard for me to understand that when FICO dropped more than 10 points, CK showed no change at all. Of course, different financial institution may not report the same information to all three agencies, which, as you said, may cause discrepancy in scores among agencies.

  5. InTheIndustry |  Oct 02, 2009 at 11:58 am

    Even when they are using the same formula brand, like FICO, they won’t have the same scores because of the different data. My personal FICO scores across each bureau vary by as much as 60 points, and just because one moves doesn’t mean the others will move.

    Don’t forget that FICO, too, has multiple models – there’s FICO for home loans, auto loans, credit cards, etc. So you might get an Experian FICO targeted for mortgages over here, and a TransUnion FICO for new revolving accounts over there, and those numbers aren’t going to be the same at all, nor will they necessarily move in the same way. Different data and different models. Consumer-level score services don’t go into this kind of detail usually when they tell you what you’re getting – people just see “FICO” and think it’s all the same, but it’s really not. It depends on who’s providing it, and on what they’re using it for.

    The only saving grace for the consumer is that they are all highly correlative. So, you’re not going to be 780 in one place and 520 in another. More like 700 and 780. Sometimes you’ll get stuck in the 670-750 range, and that sucks, because who knows what lenders are seeing. All you can really do is keep an eye on one or two scores and make sure nothing blows up. Lenders make decisions on more than just credit scores anyhow. Scores get your foot in the door, but income and especially DTI really mean a lot.

  6. InTheIndustry |  Oct 02, 2009 at 12:05 pm

    One more thing I forgot to mention – my own Credit Karma score has fluctuated over a 70-point range since I signed up a year or so ago, but I’ve done a lot since then. Bought a house, paid off an auto loan, picked up some new credit cards, paid off some student loans. I have seen my score move on most inquiries, but it moves most dramatically when my debt profile changes. I bought a lot of furniture on credit cards recently, for the cash back, intending to pay off right away or at the end of the 0% term, and that stuff dropped my score quite a bit. Undoubtedly because my utilization went from something like 10% to 45%.

  7. louis fernandez |  Jun 06, 2010 at 11:13 am

    i just registered with creditkarma. didn’t want to pay 8 bucks for a score that can change daily. i know that my fico score is higher than what my creditkarma score is, but at least i have a starting point. a

    hard inquiry will only show up as one even though there were multiple ones if related to same search within 30 days.

    all in all, a good source to keep you on your toes.