FICO Scores Vs. Credit Karma and Others

Credit is a fickle thing…. there are many different “credit scores”; none right, none wrong, just different.

Before continuing I want to differentiate between a few different terms; credit “score” versus credit “report”

•Score = the number expressed to assign a value to your credit quality. Ranges between 300-850.
•Report = the information reported to the 3 credit bureaus used to determine your credit score. You can receive a credit report without receiving a credit score.

FICO, Credit Karma, Credit Sesame, etc, are all different sources to obtain your credit score. It’s important to note, that all of these use the same credit report, they just interpret the report differently to arrive at their own score. FICO is the most commonly used credit score but even FICO has (at the time of writing this) 9 different versions. Mortgage lenders use FICO 2, 4, & 5; a different version for each bureau (Equifax, Experian, & Transunion respectively). When you get a FICO score from your online banking, credit card, or somewhere else, it’s oftentimes a later version of FICO, which will differ from what a mortgage lender sees.

FICO is just one of what I’ll refer to as a “brand” of credit scores.  Credit Karma is another brand of credit score. There are many more.

When monitoring your own credit score, what’s more important than the score you see is to watch your credit score trend since they commonly seem to rise and fall in conjunction. Just know that different loan industries (mortgages, utility companies, timeshares, etc.) may use different brands or FICO versions to get your credit score. All mortgage companies use the same FICO version so while your score may differ with a mortgage lender vs to what you see on Credit Karma, all lenders will see the same score as each other if more than one were to pull your credit.

In summary, free credit reports and scores (Credit Karma is my favorite) are great to use. They allow you to track your estimated score and most importantly, track potential fraud or unexpected changes. I refer to free scores as a great barometer of your credit. Use them, but don’t worry when my FICO score is different than what you were expecting.