That’s Not what Credit Karma said! | Del-One FCU Financial Blog

Working in a branch, we have a lot of members that come in and are taken aback when we pull their credit score. They were diligent in monitoring their score through online services like Credit Karma or through scores given by their credit card provider, but when they came in to apply for a loan or credit card, their score is not what they’d expected. This is because the idea that each person has one “true” credit score is a fallacy. Credit scores and credit reporting can be complex, so let’s break it down.

Let’s first look at the information that goes into calculating a credit score. There are three main credit reporting bureaus which keep track of a person’s total amount of debt, the age and payment history of each outstanding loan or credit card, the types of debt that you owe, and the total number of inquiries made about your credit in relation to an application for a loan or credit card within the past two years. These bureaus are Equifax, TransUnion, and Experian. Ideally, all three bureaus would have identical information. Unfortunately, maintaining these complex records for all US consumers is a lot of data to process and errors sometimes occur. Additionally, some financial institutions will only report payment history to some, but not all, bureaus. What this means to you is that if one credit score is calculated using the data on-file with TransUnion and another is calculated with data on-file with Equifax, you may end up with different scores if the data on-file between the two bureaus was inconsistent.

Next, we’ll look at how all your personal data is calculated into a credit score. In order to make this happen, some decisions must be made: What are the most important pieces of information – showing that you’ve had an account for a long time? Managing a credit card limit responsibly? How important are late payments? How important are small collections accounts or medical payment data? These decisions are important as they impact how each piece of information factors into the calculation. They also matter to lenders as some pieces of information may be more important for some loan decisions than others. For example: Managing a credit card limit responsibly may be less important when looking at a buyer’s ability to handle a mortgage payment but may be very important when the same buyer is applying for a credit card. This results in a variety of calculation methods that have been created over time-each with slightly different calibrations on the priorities and importance of each data item. The FICO score is the most universally known, but there are currently 9 versions of a FICO score! What this means to you is that if you apply for a home with Del-One, we will check your FICO 4 score, but if you apply for a credit card, we will check your FICO 8 score. Even if both scores were pulled using the same reporting bureau and identical data, you will likely end up with two different scores because of the differences in the calculation method.

So why is your score different on places like Credit Karma and what’s the point of using those services if the scores aren’t “accurate”? Credit Karma looks at two bureaus- Equifax and TransUnion and applies a Vanguard calculation method to the data while Del-One typically looks at Experian and applies a FICO 8 calculation method. Discrepancies in the data between bureaus and differences in the nuances of the calculation methods frequently cause scores to vary. While there may not be one “true” credit score, services such as these do still provide valuable information. They allow users to review the information being reported regularly and help users to detect misinformation more rapidly than if their credit report had not been reviewed. They also provide a gauge as to how you’re doing and provide tips on how to improve your score. Using these services as another tool in your toolbox is great, just remember that there are a wide range of factors involved and that more than one tool may be needed to get the job done.

Disclaimer: The opinions expressed in blog posts are the personal opinions of the writer(s) and do not necessarily reflect the views of Del-One FCU. Any reference to other sources of information, or links to other websites does not imply a recommendation or endorse the views expressed in those sources.

Source URL: Read More
The public content above was dynamically discovered – by graded relevancy to this site’s keyword domain name. Such discovery was by systematic attempts to filter for “Creative Commons“ re-use licensing and/or by Press Release distributions. “Source URL” states the content’s owner and/or publisher. When possible, this site references the content above to generate its value-add, the dynamic sentimental analysis below, which allows us to research global sentiments across a multitude of topics related to this site’s specific keyword domain name. Additionally, when possible, this site references the content above to provide on-demand (multilingual) translations and/or to power its “Read Article to Me” feature, which reads the content aloud to visitors. Where applicable, this site also auto-generates a “References” section, which appends the content above by listing all mentioned links. Views expressed in the content above are solely those of the author(s). We do not endorse, offer to sell, promote, recommend, or, otherwise, make any statement about the content above. We reference the content above for your “reading” entertainment purposes only. Review “DMCA & Terms”, at the bottom of this site, for terms of your access and use as well as for applicable DMCA take-down request.

Acquire this Domain
You can acquire this site’s domain name! We have nurtured its online marketing value by systematically curating this site by the domain’s relevant keywords. Explore our content network – you can advertise on each or rent vs. buy the domain. | Skype: TLDtraders | +1 (475) BUY-NAME (289 – 6263). Thousands search by this site’s exact keyword domain name! Most are sent here because search engines often love the keyword. This domain can be your 24/7 lead generator! If you own it, you could capture a large amount of online traffic for your niche. Stop wasting money on ads. Instead, buy this domain to gain a long-term marketing asset. If you can’t afford to buy then you can rent the domain.

About Us
We are Internet Investors, Developers, and Franchisers – operating a content network of several thousand sites while federating 100+ eCommerce and SaaS startups. With our proprietary “inverted incubation” model, we leverage a portfolio of $100M in valued domains to impact online trends, traffic, and transactions. We use robotic process automation, machine learning, and other proprietary approaches to power our content network. Contact us to learn how we can help you with your online marketing and/or site maintenance.