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Q: I know several people that use CreditKarma to get their credit reports and they swear that the numbers are right, but I’ve read that this service isn’t entirely accurate. Which is true?
A: CreditKarma uses FAKO scores, not FICO scores. FAKO scores are an estimate of your FICO score, which is the score that lenders will usually pull when they check your score. CreditKarma shows you your TransRisk score, your Vantage Score, and your auto insurance score. The first two are the two that you should be concerned about when applying for loans. The TransRisk score is the main score CreditKarma uses, and may be better for you to look at, since the number scale is 300 to 850—the same as your FICO score range.
TransRisk scores (as well as other non-FICO scores) can differ from your actual scores by 50 points or more for some. For most people, it won’t be too large of a difference, but it may be worth it to go ahead and pay for your FICO scores if you want to apply for a card or loan and you’re near the cut off. A difference of 50 points could be the difference between qualifying for a card and having them do a hard credit pull for nothing.
The truth is, it’s hard to estimate which score a company will use when you apply for a loan. Even your FICO scores from each of the three bureaus will differ, sometimes by a large amount. Unless the company you are using tends to pull from the same credit bureau (such as American Express pulling from Experian), you can’t predict what score they will see. Services like CreditKarma are good for tracking your progress, but they can’t tell you whether you will qualify for a certain card or not. Then again, your FICO scores won’t always, either.