Written By: Calvin O’Neal Russell Jr

With so many credit scores and reports out there to choose from, its difficult to know which one is the most accurate. But in reality, all credit scores are accurate, which includes Credit Karma. Many of client’s use Credit Karma. The number question I hear “Is Credit Karma Really Accurate?” The short answer is YES. Let me explain why.

1. Different Scoring Algorithms
I have personally seen at least 9 different Scoring Algorithms that offer either a free or paid credit score. Technically, any credit score is accurate as some companies provide their own algorithm. An algorithm is like a machine that takes your information from your credit bureau reports, processes that information, and gives a score based on their scoring methods.

2. Who Uses What Score?
What surprises me the most is that this is the question that many consumers don’t ask very often. The score that is used the most is the FICO Score. 90% of lenders choose to use the FICO Score as it has been trusted and used for years. You can obtain your FICO Score here. The closest competitor to FICO, is Vantage 3.0, which is the algorithm that Credit Karma uses. Vantage 3.0 is used by Less than 10% of lenders as it is fairly new to the credit scoring game. Vantage 3.0 is also used by Transunion to package a monthly subscription that covers some additional features as well. Many other 3rd party companies package with this algorithm as well even though it’s free from Credit Karma!

3. Why So Many Scores?
In short, blame FICO. This is actually a great idea that they came up with. For example, you have a FICO Mortgage Score, Auto Score, Credit Card Score, and a few others. The reason why this is a great idea is because most lenders focus on their area of loan products to the consumer. For example, if you are looking to get financed for an auto loan, the bank will look at your full credit report, but the score that they are the most interested in is the FICO Auto Score. This helps if you have been late on your mortgage but always pay your car payments on time. FICO feels that a consumer shouldn’t be penalized on the entire overall score so that’s why the separate the two. This doesn’t mean your overall score doesn’t decrease because of the late mortgage payment. This simply means your mortgage score will decrease more than your auto score.

The Bottom Line
In short, most lenders use the FICO Score. Be sure to obtain your fico scores soon so you can see what the banks see before you walk in looking for financial products. Doing this one simple step will save you time and possibly money. For more articles like this, be sure to join my email list for more articles and coupons on my services.