Your credit score and report are critical for your financial well-being. That’s why many people actively track their information over time, allowing them to address issues or make choices to improve their situation. Credit Karma is one option for monitoring your details. But is Credit Karma accurate? Is Credit Karma the best way to track your credit score? If you’re considering questions like that, here’s what you need to know.

What Credit Karma Shows You

When you sign up with Credit Karma, you get access to various kinds of information. While much of what’s available is offers for financial products and services, users also gain insights into their credit.

By heading to the “Credit” section of the app, users can see their most recent score as well as an overview of how various credit factors impact that score. For example, there’s an entry for the user’s payment history, with the percentage reflecting the number of payments that are listed as on-time. It also has a notation for how impactful that factor is, with payment history being listed as “high impact.”

Those details help a person understand where they are shining and if there are specific areas where they could improve. This empowers users to take control of their credit, making sounder choices that lead to higher scores.

For users who want to take a deeper dive, they can view their full credit reports. Here, they’ll see their score again. However, they can also peruse a list of their accounts (open and closed), the state of those accounts, recent inquiries, accounts in collections, and more.

All of the details help a person see if there may be errors harming their score. Plus, they can scan the accounts lists looking for accounts that aren’t theirs, which could be a sign of a mistake or, in the worst-case scenario, identity theft.

Are Credit Karma’s Credit Reports Accurate?

Yes, Credit Karma’s credit reports are generally accurate. In reality, Credit Karma isn’t creating a new credit report. Instead, it’s pulling information directly from a credit bureau or two and showing that information to you. As long as the source credit bureau’s information is accurate, Credit Karma’s will be as well.

Typically, the only time this isn’t the case is when there’s new activity. Credit Karma does refresh the information as frequently as every seven days, depending on how often you log into the app. That means if something changes in your report before the next refresh, the information may be out of date.

Additionally, since Credit Karma relies on reports from bureaus, if a bureau doesn’t have a recent activity on your report, it won’t show for Credit Karma either. For instance, it can take 30 to 60 days for a new account to show up on your credit report.

Plus, not all lenders report to all bureaus, so information may be missing because that bureau wasn’t informed of that account. That’s one of the reasons why your report and score can vary from one bureau to the next, as they are working off of different information.

In those scenarios, the information you see from Credit Karma isn’t technically inaccurate. It’s correct based on what the bureau knows. The trick is, the reporting system itself isn’t perfect.

However, errors in credit reports are always possible. If the credit bureau has incorrect data or you’ve been the victim of identity theft, Credit Karma’s report will also have that inaccurate information. Again, this isn’t the fault of Credit Karma as they have no way of knowing that there’s an issue with the bureau’s data. If that occurs, you need to reach out to the bureau, not Credit Karma, to get it corrected.

Are Credit Karma’s Credit Scores Accurate?

Yes, Credit Karma’s credit scores are mainly accurate. The issue is, Credit Karma doesn’t use the credit score you’re expecting, and that can make it look like there is a discrepancy when there isn’t.

When people apply for credit, the lender usually pulls FICO credit scores. Since they are more widely used, these are the credit scores people are used to seeing.

However, Credit Karma provides users with their VantageScore (currently based on the VantageScore 3.0 model). That isn’t as widely used by lenders when they decide whether to extend a person credit, up a credit limit, or make a similar lending decision. This decreases the degree of familiarity with the scoring model.

This wouldn’t be in issue if the VantageScore and FICO score were calculated in the same manner. However, even though both use the same score range (300 to 850), how a VantageScore is calculated does differ from how a FICO score is calculated.

As a result, a user’s VantageScore and FICO score can be dramatically different, which can cause some confusion. But that doesn’t make either one inaccurate; they simply use different approaches to determine a person’s creditworthiness.

Generally, people’s VantageScores and FICO scores do align to a degree. For example, if your VantageScore qualifies as “good,” there’s a strong chance your FICO score does as well. However, some people do see deviations. For instance, they might have a “good” FICO score and a “fair” VantageScore, even though those scores came from the same bureau.

Using Credit Karma to Track Your Credit

Ultimately, Credit Karma is accurate. You just have to understand that most lenders don’t look at your VantageScore when deciding whether to approve you and that your VantageScore does differ from your FICO score.

But even with that, that doesn’t mean you can’t make the most of Credit Karma. You can monitor your account lists for signs of errors or identity theft. Tracking your credit score is also a good idea. Usually, if your VantageScore rises, so does your FICO score, so you can use Credit Karma to see if you’re making positive progress.

Plus, Credit Karma is free. The company makes money through partnerships with the financial product and service providers it advertises or recommends. Users never pay directly for the service, which is another reason it’s worth considering.

In your mind, is Credit Karma accurate? Do any of the discrepancies above leave you concerned? Have you ever had an issue with the quality of Credit Karma’s information? Share your thoughts in the comments below.

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