Credit Karma vs. FICO: How Their Credit Scores Compare
Credit Karma and FICO are two completely different types of companies. Like WalletHub, Credit Karma is an independent website that, among many other features, gives users free access to their Vantage 3.0 credit score. FICO, officially the Fair Isaac Corporation, is a credit-scoring company whose eponymous scores are the biggest competitors to Vantage.
Which Is Better? In a word, neither. Or, perhaps more accurately, whichever is free and updated most frequently (WalletHub is the only website that does so daily). Neither type of credit score is inherently better than the other, and most lenders apply proprietary modifications to whatever scores they use anyway. That means you don't need to seek out a particular Vantage score or FICO score because you won’t find the exact score you're being judged with regardless.
Credit Karma vs. FICO: FAQs
Hopefully, you now have a better sense of what distinguishes Credit Karma, FICO and the credit scores they provide, but it’s understandable if you still have questions. People often do. Below you’ll find explanations for the most common queries that we receive.
How Do Vantage & FICO Scores Differ? Most of the specifics are confidential, but at the heart of the matter are discrepancies regarding what inputs are used and how they are weighted. Small changes in these areas can lead to quite different final scores. Credit utilization provides one example of differentiation, particularly as it relates to the treatment of charge cards by many of the older FICO models still in use today, according to John Ulzheimer, a credit-scoring expert who previously worked for FICO and Equifax.
“Charge cards are considered by FICO scores but only those versions prior to FICO 8,” Ulzheimer said. “FICO 8 has critical mass but is not the version being used by the mortgage industry. So, it's safe to say that charge cards do count in revolving utilization for some FICO scores, but not all. And yes, VantageScore scores do not consider charge cards in their revolving utilization metrics.”
Which Type Of Score Is Most Accurate? For starters, it’s important to remember what credit scores were designed to do. They’re meant to predict a consumer’s likelihood of defaulting on a financial obligation, which means they ultimately serve the interests of financial institutions and not the individuals whose financial lives they encapsulate. With that being said, there has been no official comparison of the accuracy of Vantage and FICO credit scores, unfortunately enough, but one metric that we can use as a proxy is market share.
Judging from pace with which VantageScore 3.0 has grown (over six billion scores were issued in 2015), it is clear that financial institutions – the only ones with the capability of comparison – seem to believe that Vantage scores as just as accurate as FICO scores. Plus, for whatever it’s worth, some industry observers have made the claim that VantageScore 3.0 is more inclusive than the most common FICO scores, meaning it’s possible to generate a score for a greater number of people. But whether that’s a measure of accuracy is a matter for debate.
Can You Convert A Vantage Score To A FICO Score? There is no way to accurately convert credit scores from the VantageScore 3.0 model to any FICO score model. Their specifics are corporate secrets, and their differences aren’t consistent from person to person.
What’s more, some of FICO’s industry-specific scores actually use a different scale (250 to 900) than most credit scores (300 to 850). This obviously stands to create some confusion for consumers. After all, a particular score within this scale will mean something completely different than its equivalent based on most other models.
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