Author Topic: Credit Karma (more like Credit Liars) (Read 13357 times)

Bob W

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Credit Karma (more like Credit Liars)
« on: April 20, 2015, 11:55:23 AM »
In mid February I put up a forum post seeking input into how to improve my credit score.

I had used CK as my reference. (Posters had warned me that CK is a FAKO score but I figured it should be fairly close)

Mistake!!

So for reference my CK score shows 730 and 733. Wow, I thought I was doing great and primed to start reward mileage applications.

Then I come to find that my actually credit score through Transunion is 662. The very same score noted as 733 on CK with Transunion noted in big letters. Credit Sesame also shows a 730 score.

So be warned!

Ironically as I type this there is a Credit Karma banner at the bottom of the page.
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Elliot

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Re: Credit Karma (more like Credit Liars)
« Reply #1 on: April 20, 2015, 12:17:49 PM »
I get my FICO on my credit card statement, and the past month was the first time CK was withing 15pts of my actual score. In the past, it have bee 50-60 below my actual.

To be fair, they are very upfront about the fact that is an estimate only.

jorjor

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Re: Credit Karma (more like Credit Liars)
« Reply #2 on: April 20, 2015, 12:18:45 PM »
I just got a credit check for a mortgage pre-approval. The TransUnion score on Credit Karma was almost right on, but Equifax was low by about 20 points.

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Re: Credit Karma (more like Credit Liars)
« Reply #3 on: April 20, 2015, 12:25:40 PM »
Why so low? Past dues? Collection items? Tax Lien? Maxed out cards?

Bob W

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Re: Credit Karma (more like Credit Liars)
« Reply #4 on: April 20, 2015, 12:40:14 PM »
Why so low? Past dues? Collection items? Tax Lien? Maxed out cards?

Medical collection item

no past dues and a state public record lien that was cleared up within 2 months 3 years ago that will be on there for eons.

I had put off some of my recent efforts at improving as I was under the CK impression that I was good and rising. So now it is back to fighting for every point of increase. Not a world ender just means I'll miss out on 7K of free travel for a year that I though I would be having.

Apparently the CK score can be hugely off in any direction. doctor of credit had a CK score of around 730ish and his actual score was 800+.

So yeah, CK is pretty much a joke and it is just luck if they are within 30 points of your actual score.
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RexualChocolate

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Re: Credit Karma (more like Credit Liars)
« Reply #5 on: April 20, 2015, 12:54:00 PM »
It's free and it looks like the max error is 70 points, typically within 30. I don't really understand your overt derision of the service, it works pretty well.

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Re: Credit Karma (more like Credit Liars)
« Reply #6 on: April 20, 2015, 01:05:30 PM »
Yup. Mine was off about 80 points when I applied for a mortgage a month ago. CK = 780, actual 695.

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Re: Credit Karma (more like Credit Liars)
« Reply #7 on: April 20, 2015, 01:09:36 PM »
Credit Karma told me I had a 650 when I applied for my mortgage a few years back. During the credit check, I was told I had a 760 by the mortgage company.

I don't trust CK at all.

trailrated

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Re: Credit Karma (more like Credit Liars)
« Reply #8 on: April 20, 2015, 01:11:28 PM »
It's free and it looks like the max error is 70 points, typically within 30. I don't really understand your overt derision of the service, it works pretty well.

The error on mine was around 80 points. While yes, the service is free (paid for by all of the ads) many people use it as a benchmark and plan mortgage interest rates etc. on the information. An error that high could costs thousands of dollars in interest over the course of a loan. That being said, I have to agree with the OP... as far as representing your actual score, they are shit. If you want credit card reviews and what not, they are great.
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SaintM

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Re: Credit Karma (more like Credit Liars)
« Reply #9 on: April 20, 2015, 01:28:01 PM »
Everyone repeat after me: "There is no such thing as an objective, universal 'credit score.'"

Every company (lender, website, FICO, etc.) has proprietary formulas that assign varying weights and importance to input variables. Borrowers have some degree of control over the inputs by checking reports and disputing inaccurate information. They have no control over what the lender does with the information.

Elliot

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Re: Credit Karma (more like Credit Liars)
« Reply #10 on: April 20, 2015, 01:29:41 PM »
Of COURSE you shouldn't actually plan major purchases based on that. It's an estimate. Would you plan a major life event like a new baby based on an estimated pregnancy test?

RexualChocolate

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Re: Credit Karma (more like Credit Liars)
« Reply #11 on: April 20, 2015, 01:34:55 PM »
It's free and it looks like the max error is 70 points, typically within 30. I don't really understand your overt derision of the service, it works pretty well.

The error on mine was around 80 points. While yes, the service is free (paid for by all of the ads) many people use it as a benchmark and plan mortgage interest rates etc. on the information. An error that high could costs thousands of dollars in interest over the course of a loan. That being said, I have to agree with the OP... as far as representing your actual score, they are shit. If you want credit card reviews and what not, they are great.

The error doesn't cost you anything, bad credit does.

Again, its free and all evidence points to the fact that it is pretty reliable. Not really understanding the ire towards it.

trailrated

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Re: Credit Karma (more like Credit Liars)
« Reply #12 on: April 20, 2015, 02:07:51 PM »
It's free and it looks like the max error is 70 points, typically within 30. I don't really understand your overt derision of the service, it works pretty well.

The error on mine was around 80 points. While yes, the service is free (paid for by all of the ads) many people use it as a benchmark and plan mortgage interest rates etc. on the information. An error that high could costs thousands of dollars in interest over the course of a loan. That being said, I have to agree with the OP... as far as representing your actual score, they are shit. If you want credit card reviews and what not, they are great.

The error doesn't cost you anything, bad credit does.

Again, its free and all evidence points to the fact that it is pretty reliable. Not really understanding the ire towards it.

Very true on the first point, but when they have a margin of error of 14% based on your earlier statement (a few other posters have confirmed with a score a lot lower, or higher than represented by CK) it should not be considered "pretty reliable". While I do not pay anything to use google maps, I would not use it for directions if it took me to the wrong location 14% of the time.
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acanthurus

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Re: Credit Karma (more like Credit Liars)
« Reply #13 on: April 20, 2015, 02:51:32 PM »
My official score always within a few points of my CK score (shrug).

Bob W

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Re: Credit Karma (more like Credit Liars)
« Reply #14 on: April 20, 2015, 02:59:47 PM »
It's free and it looks like the max error is 70 points, typically within 30. I don't really understand your overt derision of the service, it works pretty well.

The error on mine was around 80 points. While yes, the service is free (paid for by all of the ads) many people use it as a benchmark and plan mortgage interest rates etc. on the information. An error that high could costs thousands of dollars in interest over the course of a loan. That being said, I have to agree with the OP... as far as representing your actual score, they are shit. If you want credit card reviews and what not, they are great.

The error doesn't cost you anything, bad credit does.

Again, its free and all evidence points to the fact that it is pretty reliable. Not really understanding the ire towards it.

Very true on the first point, but when they have a margin of error of 14% based on your earlier statement (a few other posters have confirmed with a score a lot lower, or higher than represented by CK) it should not be considered "pretty reliable". While I do not pay anything to use google maps, I would not use it for directions if it took me to the wrong location 14% of the time.

Agreed. I was expecting an error in the 3-5% range. It appears to be off by 28% or more if I'm thinking correctly. It is a 500 point scale (approximately) so if they could be off 70 points in either direction that is 140 points divided by 500. (It is actually far worse than the percentage because it is more of a bell curve and the difference between a "very good" score and a "poor" score can be 70 points. For the most part the only incremental scores that matter are those between 670 and 750.) So yeah, 70 points can be a huge freaking deal.

FICO is "the" score used by credit card rewards companies and mortgage companies and auto lenders. In my case, a bum deal, as I actually changed my aggressive behavior to improve my credit score because I believed my score was much higher. I was living in the "my credit is pretty good!" zone when in fact my credit sucks.

The fact that CK uses the Experian and Transunion logos and brands gives a high implication that there is some correspondence between the CK score and the actual FICO score, when in fact there is not. CK is a credit card marketing company pure and simple.

And to be truthful I don't think someone whose CK scored showed 690 but was actually a 750 FICO would be too pleased either. Showing that 690 would be enough to eliminate them from any rewards programs. It may even be enough to discourage them from buying a home.

Don't forget FICO scores are used for all sorts of stuff from housing rental, to security clearances, to employment screenings, to insurance pricing. So it goes way beyond just credit.

Yeah, crap, damn, hell fire, I'm pissed. Screw Credit Karma!
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Professor Ecks

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Re: Credit Karma (more like Credit Liars)
« Reply #15 on: April 20, 2015, 04:12:17 PM »
There's a lot more to it than simply FICO vs CK. You have to understand that all credit score companies (including FICO) have several different models tailoring to the industry issuing the request for a credit score. The article I linked below indicates that an individual could conceivably have 56 different FICO scores, depending on who is requesting the score. Of course, it's very unlikely that each score would be unique. It's far more likely that a few models would score the same results.

My fiance's last Discover card statement said she had a FICO score of 670 using her TransUnion report data. Her credit union also uses the TransUnion report, and they provided a FICO of 636. So the same company provided two scores that were 33 points different using data from the same report during the same time period, based solely on the algorithm requested by the credit issuer.

So it's not necessarily that CK was "wrong" and FICO was "right," it's that the credit issuer requested a formula from FICO that weighted things significantly differently than the formula CK uses.

http://bankrate.com/finance/credit/how-many-fico-credit-scores-do-you-have.aspx
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RexualChocolate

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Re: Credit Karma (more like Credit Liars)
« Reply #16 on: April 20, 2015, 04:20:37 PM »
I don't really know why you expected a prime/super prime score with 2 uncontested and unresolved derogatory marks on your credit score. Your negative credit history is keeping you from being able to exploit credit card traveling perks, not credit karma.

This is like being mad at restaurants because you're fat. Yes, they may not have helped you, but there is no causative link.

Prepube

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Re: Credit Karma (more like Credit Liars)
« Reply #17 on: April 20, 2015, 05:44:41 PM »
just out of curiosity, i checked a couple sources for my score...

From my Credit Union (as of 1/31/15): 764
From Credit Sesame: 793
From Credit Karma: (TU) 797 (Equifax) 802 (i don't know why it gives me both)
From TransUnion, which had a completely different kind of score (VantageScore?): 926/990

I don't know... seem pretty accurate to me, but maybe that's because i only have a couple of "bad" marks on my record. One of those bad marks was a $10000.00 disputed medical bill from about ten years ago, by the way. So, Bob W, there's hope for you in a few years. I'm probably a lot older than you, but the credit scores did go up after a few years. I always made sure to document the dispute, and that info eventually worked its way into the records. When i pull my whole report now, I can see the notes about the dispute, including the info i gave them.

EDIT: Sorry Bob, didn't notice you and i were almost the same age. Strike my comment about "there's hope for you", too, because it just sounds wrong.
« Last Edit: April 20, 2015, 06:10:02 PM by Prepube »

forummm

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Re: Credit Karma (more like Credit Liars)
« Reply #18 on: April 20, 2015, 05:46:55 PM »
I think you can get a free FICO score each month with Capital One cards. Discover advertises something similar. I think Walmart has the same offer.

trailrated

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Re: Credit Karma (more like Credit Liars)
« Reply #19 on: April 20, 2015, 06:06:14 PM »
I don't really know why you expected a prime/super prime score with 2 uncontested and unresolved derogatory marks on your credit score. Your negative credit history is keeping you from being able to exploit credit card traveling perks, not credit karma.

This is like being mad at restaurants because you're fat. Yes, they may not have helped you, but there is no causative link.

It is not that he expected the super prime score, it is that CK lead him to believe that he had it already and he believed their rating system to be "somewhat accurate" which in his case was not.

So to use your above analogy it would be more like being mad at a company that makes a scale that reads your weight as 180lbs when you actually weigh 200lbs. Yes you could be more fit, but it is more difficult when the tool you use to measure your success is "broken".

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trailrated

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Re: Credit Karma (more like Credit Liars)
« Reply #20 on: April 20, 2015, 06:07:01 PM »
There's a lot more to it than simply FICO vs CK. You have to understand that all credit score companies (including FICO) have several different models tailoring to the industry issuing the request for a credit score. The article I linked below indicates that an individual could conceivably have 56 different FICO scores, depending on who is requesting the score. Of course, it's very unlikely that each score would be unique. It's far more likely that a few models would score the same results.

My fiance's last Discover card statement said she had a FICO score of 670 using her TransUnion report data. Her credit union also uses the TransUnion report, and they provided a FICO of 636. So the same company provided two scores that were 33 points different using data from the same report during the same time period, based solely on the algorithm requested by the credit issuer.

So it's not necessarily that CK was "wrong" and FICO was "right," it's that the credit issuer requested a formula from FICO that weighted things significantly differently than the formula CK uses.

http://bankrate.com/finance/credit/how-many-fico-credit-scores-do-you-have.aspx

Thank you for the link, great info.
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Bob W

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Re: Credit Karma (more like Credit Liars)
« Reply #21 on: April 20, 2015, 09:32:41 PM »
I don't really know why you expected a prime/super prime score with 2 uncontested and unresolved derogatory marks on your credit score. Your negative credit history is keeping you from being able to exploit credit card traveling perks, not credit karma.

This is like being mad at restaurants because you're fat. Yes, they may not have helped you, but there is no causative link.

It is not that he expected the super prime score, it is that CK lead him to believe that he had it already and he believed their rating system to be "somewhat accurate" which in his case was not.

So to use your above analogy it would be more like being mad at a company that makes a scale that reads your weight as 180lbs when you actually weigh 200lbs. Yes you could be more fit, but it is more difficult when the tool you use to measure your success is "broken".
. Exactly.
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kpd905

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Re: Credit Karma (more like Credit Liars)
« Reply #22 on: April 21, 2015, 06:28:44 AM »
I've seen a 60-80 point difference between CK and my real FICO scores, so I've stopped using CK. So many credit cards are offering free FICO scores now.
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paddedhat

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Re: Credit Karma (more like Credit Liars)
« Reply #23 on: April 21, 2015, 07:02:22 AM »
If all banks were like USAA things would be better, :P

Having been repeatedly screwed by USAA while dealing with my father's estate, I can assure you that USAA is far from the magical place that many in the military think that it is. The estate was settled 2-1/2 years ago. Late last year they sent me a "restated earnings" 1099. One of the estate accounts ended the 2012 tax year with no earnings. Thirty months later they decided to change it from $0 to over $5K. Nice, I then spent a few hundred with the estate accountant and $1300 in taxes AND PENALTIES to clean up the mess, since this group of ass clowns can't even count. My accountant, estate accountant and estate lawyer all has the same response. Restated earnings are extremely unusual, especially YEARS later. Fuck USAA, and if you are one of their cheerleaders, remember this post, down the road, when they put it to you. It's just a matter of time.

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Re: Credit Karma (more like Credit Liars)
« Reply #24 on: April 21, 2015, 10:05:58 AM »
I've seen a 60-80 point difference between CK and my real FICO scores, so I've stopped using CK. So many credit cards are offering free FICO scores now.

Ain't no such thing as a "real" or "official" FICO score.

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Re: Credit Karma (more like Credit Liars)
« Reply #25 on: April 21, 2015, 10:14:54 AM »
The credit score given on mint is also not perfect. Mine says like 760 and my actual score when it was pulled so I could refi my house a few weeks ago was 795 on average (but in my case it was a nice surprise, not a shock).
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Re: Credit Karma (more like Credit Liars)
« Reply #26 on: April 21, 2015, 12:57:04 PM »
I'm in the same situation. CK score 735ish, FICO score reported on a credit card and by my credit union of 685. That's a really important 50 point swing. I have a medical debt that went to collections (b/c I wasn't billed for the final amount and they didn't follow up-just sent it to collections. what?!?). That doesn't drag my score down on CK nearly as much as it does elsewhere. 4 years left...

Iron Mike Sharpe

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Re: Credit Karma (more like Credit Liars)
« Reply #27 on: April 21, 2015, 01:28:05 PM »
I'm in the same situation. CK score 735ish, FICO score reported on a credit card and by my credit union of 685. That's a really important 50 point swing. I have a medical debt that went to collections (b/c I wasn't billed for the final amount and they didn't follow up-just sent it to collections. what?!?). That doesn't drag my score down on CK nearly as much as it does elsewhere. 4 years left...


Seems like for you and the OP, you both have medical collections. Possible that CK does not have access to records of medical collections for whatever reason. They might only have access to collections from financial institutions.

My experience has been that CK has been very close to what credit score.

Bob W

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Re: Credit Karma (more like Credit Liars)
« Reply #28 on: April 21, 2015, 01:34:08 PM »
I'm in the same situation. CK score 735ish, FICO score reported on a credit card and by my credit union of 685. That's a really important 50 point swing. I have a medical debt that went to collections (b/c I wasn't billed for the final amount and they didn't follow up-just sent it to collections. what?!?). That doesn't drag my score down on CK nearly as much as it does elsewhere. 4 years left...


Seems like for you and the OP, you both have medical collections. Possible that CK does not have access to records of medical collections for whatever reason. They might only have access to collections from financial institutions.

My experience has been that CK has been very close to what credit score.

Nope -- medical shows right on their report. They basically have the same file information that the Bureaus have. That is what is so weird about their program. I'm sure some peoples scores are close and that is what I assumed. People had warned me about the FAKO scores but I just thought to myself that it may not be 100% the same. I never imagined it would be off that much. Although in retrospect it should have been a red flag that I wasn't receiving any credit card offers in the mail.
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beltim

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Re: Credit Karma (more like Credit Liars)
« Reply #29 on: April 21, 2015, 02:01:20 PM »
If all banks were like USAA things would be better, :P

Having been repeatedly screwed by USAA while dealing with my father's estate, I can assure you that USAA is far from the magical place that many in the military think that it is. The estate was settled 2-1/2 years ago. Late last year they sent me a "restated earnings" 1099. One of the estate accounts ended the 2012 tax year with no earnings. Thirty months later they decided to change it from $0 to over $5K. Nice, I then spent a few hundred with the estate accountant and $1300 in taxes AND PENALTIES to clean up the mess, since this group of ass clowns can't even count. My accountant, estate accountant and estate lawyer all has the same response. Restated earnings are extremely unusual, especially YEARS later. Fuck USAA, and if you are one of their cheerleaders, remember this post, down the road, when they put it to you. It's just a matter of time.

What were the restated earnings from?

Mr Dumpster Stache

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Re: Credit Karma (more like Credit Liars)
« Reply #30 on: April 21, 2015, 02:39:28 PM »
Is Credit Karma accurate as far as the total number of accounts and such? We've been using it as a way to make sure we haven't suffered identity theft (DW had info in one of the insurance hacks). Even if the score is way off, the information on what accounts you have when should still be good, right?

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Re: Credit Karma (more like Credit Liars)
« Reply #31 on: April 21, 2015, 02:50:56 PM »
Well, after reading through this thread, I figured I'd jump on to Credit Karma and see what it shows my score as...
Transunion shows 763
Equifax shows 772

When we got our mortgage two years ago, my credit score was a 735. I have since paid off an additional loan and am paying on my student loans. However, I'm not going to have my credit report actually ran to verify if credit karma is close or not.

Bob W

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Re: Credit Karma (more like Credit Liars)
« Reply #32 on: April 21, 2015, 02:52:10 PM »
Is Credit Karma accurate as far as the total number of accounts and such? We've been using it as a way to make sure we haven't suffered identity theft (DW had info in one of the insurance hacks). Even if the score is way off, the information on what accounts you have when should still be good, right?

It appears to be. I believe that Credit Sesame has some kind of identify theft freebee when you sign up. To be fair, their score showed the same as CK.
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Re: Credit Karma (more like Credit Liars)
« Reply #33 on: April 21, 2015, 05:09:38 PM »
If all banks were like USAA things would be better, they provide the official score each month for free if you have one of their cards. :P

By "official" you mean USAA's display of an Experian Vantagescore, which is different than a FICO score, which is different than a score based on Transunion or Equifax, which is different than a website score, which is different than...you get the point.

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Re: Credit Karma (more like Credit Liars)
« Reply #34 on: April 21, 2015, 05:24:28 PM »
If all banks were like USAA things would be better, :P

Having been repeatedly screwed by USAA while dealing with my father's estate, I can assure you that USAA is far from the magical place that many in the military think that it is. The estate was settled 2-1/2 years ago. Late last year they sent me a "restated earnings" 1099. One of the estate accounts ended the 2012 tax year with no earnings. Thirty months later they decided to change it from $0 to over $5K. Nice, I then spent a few hundred with the estate accountant and $1300 in taxes AND PENALTIES to clean up the mess, since this group of ass clowns can't even count. My accountant, estate accountant and estate lawyer all has the same response. Restated earnings are extremely unusual, especially YEARS later. Fuck USAA, and if you are one of their cheerleaders, remember this post, down the road, when they put it to you. It's just a matter of time.

I've been happy with USAA banking and insurance products, but I also haven't done anything to stress the system (like file a claim). It seems like they're truly interested in helping their customers, but they really need to stick to the easy stuff. I tried their investment services and got burned big time. They look like amateurs compared to Vanguard or Fidelity, and that's because they are at those things.
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Re: Credit Karma (more like Credit Liars)
« Reply #35 on: April 21, 2015, 06:36:24 PM »
I use CK & its generally a bit off, but I still find it helpful for general monitoring. My actual score is between 790-800, but CK posts it in the 750-770 range. Interestingly, CK reduces your "score" if you pay cc's off monthly. A 0% utilization is worse than a 1% on their system. Anyway, I mostly use it to make sure nothing out of the ordinary shows up.

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Re: Credit Karma (more like Credit Liars)
« Reply #36 on: April 21, 2015, 06:41:21 PM »
I've been happy with USAA banking and insurance products, but I also haven't done anything to stress the system (like file a claim). It seems like they're truly interested in helping their customers, but they really need to stick to the easy stuff. I tried their investment services and got burned big time. They look like amateurs compared to Vanguard or Fidelity, and that's because they are at those things.

USAA outsourced its brokerage servicing to a Fidelity subsidiary in August. It was largely an improvement over the previous in-house system.

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Re: Credit Karma (more like Credit Liars)
« Reply #37 on: April 24, 2015, 06:11:42 AM »

What were the restated earnings from?

It's hard to say exactly, the whole USAA portfolio was a crazy and underperforming mix of crap investment selections. A result of an advisor who reallocated everything after being asked why the market was booming, and my father's portfolio was returning a small percentage of that gain. It was a sad and classic example of why these "advisors" are full of shit, and have no chance of beating an index. This guy built a mix with some things that were rational, like blue chip consumer companies, then got stupid with things like gold, commodities and cash on the sidelines. By 2012. when I gained control of it, they were lucky to hit 5-6% after they grabbed their fees. The funny part was the call from one of their senior finance guys, after they saw the transfer order to send the entire balance to Vanguard. Lots of disbelief and groveling, with a few offers to really make me a satisfied customer if I rescinded the transfer. Having been through a similar situation with Wells-Fargo, I think it's safe to say that without MMM, Jlcollinsnh.com, and Vanguard, I would be worth roughly a third less than I am today.

protostache

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Re: Credit Karma (more like Credit Liars)
« Reply #38 on: April 24, 2015, 07:33:34 AM »
I've been using Credit Karma and Credit Sesame to keep track of things after my identity got stolen over the summer. I didn't pay much attention to the scores, other than to fret when they went way down for no perceptible reason, but this thread got me curious. I went ahead and shelled out the $60 to get all of my official FICO scores and all three real credit reports this morning (we've been thinking about refi or getting a HELOC anyway so it's useful info), and lo and behold both CK and CS are off by 10-20%.

Get what you pay for, I suppose. The thing that I don't understand is, the free scores don't match *any* of the official scores. I would understand if they were using an outdated method or something, but they're just off in weird ways.

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Re: Credit Karma (more like Credit Liars)
« Reply #39 on: April 24, 2015, 09:05:52 AM »
I've been using Credit Karma and Credit Sesame to keep track of things after my identity got stolen over the summer. I didn't pay much attention to the scores, other than to fret when they went way down for no perceptible reason, but this thread got me curious. I went ahead and shelled out the $60 to get all of my official FICO scores and all three real credit reports this morning (we've been thinking about refi or getting a HELOC anyway so it's useful info), and lo and behold both CK and CS are off by 10-20%.

Get what you pay for, I suppose. The thing that I don't understand is, the free scores don't match *any* of the official scores. I would understand if they were using an outdated method or something, but they're just off in weird ways.

This was discussed a bit previously in this thread, but the problem isn't with the scores themselves, the problem lies in what we believe the scores are telling us.

For instance, the idea that a FICO score is somehow "official" while other scores are not is flawed. It's true that the majority of companies that pull a credit score on a consumer use FICO as their source. But FICO is just one of many companies that provide credit scores. Saying that FICO is "official" is like saying Coke and Pepsi are "official" colas while the rest are not simply because the overwhelming majority of cola drinkers primarily use one of those two brands.

Another factor is that FICO offers dozens of scoring models to it's customers. Each model is weighted in different ways to provide a supposedly more accurate indicator of creditworthiness catered to the particular industry. So the number and auto dealer gets from FICO for you will probably be different than the number a mortgage company or a credit card company will get for you. The source data will be the same (the data on your credit report), but the importance placed on different factors will vary, resulting in different scores.

The FICO score you got is probably a general score measuring your overall credit risk. When you apply for a refi or HELOC, I can almost guarantee the number they pull will be different, because they will most likely request a different model. In fact, the lender could very well get a score from FICO that is much closer to the CS or CK scores you have than the "official" FICO score you paid for.

I say all this simply to drive home the point that just because the CK, CS, and FICO scores differ doesn't necessarily mean that one is "off." It's simply that the variables on your report are weighted differently in each scoring model.
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Bob W

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Re: Credit Karma (more like Credit Liars)
« Reply #40 on: April 24, 2015, 11:59:43 AM »
I've been using Credit Karma and Credit Sesame to keep track of things after my identity got stolen over the summer. I didn't pay much attention to the scores, other than to fret when they went way down for no perceptible reason, but this thread got me curious. I went ahead and shelled out the $60 to get all of my official FICO scores and all three real credit reports this morning (we've been thinking about refi or getting a HELOC anyway so it's useful info), and lo and behold both CK and CS are off by 10-20%.

Get what you pay for, I suppose. The thing that I don't understand is, the free scores don't match *any* of the official scores. I would understand if they were using an outdated method or something, but they're just off in weird ways.

This was discussed a bit previously in this thread, but the problem isn't with the scores themselves, the problem lies in what we believe the scores are telling us.

For instance, the idea that a FICO score is somehow "official" while other scores are not is flawed. It's true that the majority of companies that pull a credit score on a consumer use FICO as their source. But FICO is just one of many companies that provide credit scores. Saying that FICO is "official" is like saying Coke and Pepsi are "official" colas while the rest are not simply because the overwhelming majority of cola drinkers primarily use one of those two brands.

Another factor is that FICO offers dozens of scoring models to it's customers. Each model is weighted in different ways to provide a supposedly more accurate indicator of creditworthiness catered to the particular industry. So the number and auto dealer gets from FICO for you will probably be different than the number a mortgage company or a credit card company will get for you. The source data will be the same (the data on your credit report), but the importance placed on different factors will vary, resulting in different scores.

The FICO score you got is probably a general score measuring your overall credit risk. When you apply for a refi or HELOC, I can almost guarantee the number they pull will be different, because they will most likely request a different model. In fact, the lender could very well get a score from FICO that is much closer to the CS or CK scores you have than the "official" FICO score you paid for.

I say all this simply to drive home the point that just because the CK, CS, and FICO scores differ doesn't necessarily mean that one is "off." It's simply that the variables on your report are weighted differently in each scoring model.

That is a pretty good thought except it didn't work that way when I was a finance manager at an RV seller. We pulled a simple Bureau non industry specific for the buyer. I then sent off 3 bids to bank funders. They pulled their own scores which were exactly the same as mine. I'm sure there can and probably is variance but by default the Bureau scores are the "official" scores just like Coke is the Official beverage of whatever sport. It is official because it is the chosen score of virtually everyone one who runs a credit check and no home lender will rely on CK or CS.

To be double fair I should also mention that most home lenders or RV underwriters will not rely just on the score alone. They pull the entire report and pick it apart. The score for them is a guideline but if you have an outstanding issue on your report most home lenders will want that paid off before issuing a loan.

I imagine that CC issuers are more likely to just go with a score. And the bureau score is probably modified for them.

I'd be interested in knowing what the variance was on zrail's scores?

The 10-20% depends on how you calculate it to a degree. So I would be interested in knowing how many points off it was and how many categories that bumped you down. For instance did your score go from Excellent to good? Or Good to poor?

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Re: Credit Karma (more like Credit Liars)
« Reply #41 on: April 24, 2015, 12:14:28 PM »

What were the restated earnings from?

It's hard to say exactly, the whole USAA portfolio was a crazy and underperforming mix of crap investment selections. A result of an advisor who reallocated everything after being asked why the market was booming, and my father's portfolio was returning a small percentage of that gain. It was a sad and classic example of why these "advisors" are full of shit, and have no chance of beating an index. This guy built a mix with some things that were rational, like blue chip consumer companies, then got stupid with things like gold, commodities and cash on the sidelines. By 2012. when I gained control of it, they were lucky to hit 5-6% after they grabbed their fees. The funny part was the call from one of their senior finance guys, after they saw the transfer order to send the entire balance to Vanguard. Lots of disbelief and groveling, with a few offers to really make me a satisfied customer if I rescinded the transfer. Having been through a similar situation with Wells-Fargo, I think it's safe to say that without MMM, Jlcollinsnh.com, and Vanguard, I would be worth roughly a third less than I am today.

Mirrors my experiences with USAA investments almost perfectly. When I split from them a little over a year ago my returns were basically zero for the year being managed into 20 different funds. Knowing what I know now, I rub my forehead when my coworkers rave about having all of their finances at USAA with someone managing it for them.
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Re: Credit Karma (more like Credit Liars)
« Reply #42 on: April 24, 2015, 12:29:12 PM »
I'd be interested in knowing what the variance was on zrail's scores?

The 10-20% depends on how you calculate it to a degree. So I would be interested in knowing how many points off it was and how many categories that bumped you down. For instance did your score go from Excellent to good? Or Good to poor?

Well, this should teach me that my mental math abilities are really not up to snuff. After actually doing the math, the free scores were lower than the corresponding FICO 8 by 13 points (Equifax/CK), 15 points (TransUnion/CK), and 64 points (Experian/CS). That is, 1.6%, 1.6%, and 8.7% respectively. CK bumps me down from Excellent to Very Good for both and CS bumps me down from Very Good to Good. I think CS is so much lower because it hasn't updated since the 3rd, vs the 20th for the others.

Bob W

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Re: Credit Karma (more like Credit Liars)
« Reply #43 on: April 24, 2015, 01:44:04 PM »
I'd be interested in knowing what the variance was on zrail's scores?

The 10-20% depends on how you calculate it to a degree. So I would be interested in knowing how many points off it was and how many categories that bumped you down. For instance did your score go from Excellent to good? Or Good to poor?

Well, this should teach me that my mental math abilities are really not up to snuff. After actually doing the math, the free scores were lower than the corresponding FICO 8 by 13 points (Equifax/CK), 15 points (TransUnion/CK), and 64 points (Experian/CS). That is, 1.6%, 1.6%, and 8.7% respectively. CK bumps me down from Excellent to Very Good for both and CS bumps me down from Very Good to Good. I think CS is so much lower because it hasn't updated since the 3rd, vs the 20th for the others.

Your math may have been closer originally. 15 points on a 500 point scale is closer to 3%. Excellent to very good is probably not going to effect much though. I'm not a math wiz but there is something about the bell curve and standard deviation that multiplies those percentage points or something like that. It appears that all the action on the scores actually is in the 650 to 780ish range. Thus for all real purposes the scale is more like a 130 scale. If that is reality, then 15 points has the effective value of more like 11%.
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Re: Credit Karma (more like Credit Liars)
« Reply #44 on: April 24, 2015, 09:39:59 PM »
I have the opposite problem.

Credit Karma said 690.
The free thing on Mint.com said 683.

I could never figure out why it was so low....

Capital One credit card free score = 735.
When I got a Citi DoubleCash card they gave me my FICO score = 741.

Bob W

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Re: Credit Karma (more like Credit Liars)
« Reply #45 on: April 24, 2015, 09:44:23 PM »
I have the opposite problem.

Credit Karma said 690.
The free thing on Mint.com said 683.

I could never figure out why it was so low....

Capital One credit card free score = 735.
When I got a Citi DoubleCash card they gave me my FICO score = 741.
. Good for you! You are now eligible for over 10k in rewards travel this year. Seems CK can't come close up or down.
Better living through math.

Johnez

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Re: Credit Karma (more like Credit Liars)
« Reply #46 on: April 25, 2015, 06:02:23 AM »
Professor Ecks nails it in his post. Here is probably the best article I've seen explaining FICO scores, which explains why there are 65 different scores:

http://bankrate.com/finance/credit/how-many-fico-credit-scores-do-you-have.aspx


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Re: Credit Karma (more like Credit Liars)
« Reply #47 on: April 25, 2015, 06:12:37 AM »
I've seen a 60-80 point difference between CK and my real FICO scores, so I've stopped using CK. So many credit cards are offering free FICO scores now.

Ain't no such thing as a "real" or "official" FICO score.

Thanks, but I'm going to believe a FICO score over a FAKO score like Credit Karma.
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Re: Credit Karma (more like Credit Liars)
« Reply #48 on: April 25, 2015, 09:31:23 AM »
zing! I guess you didn't read the thread.

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Re: Credit Karma (more like Credit Liars)
« Reply #49 on: April 25, 2015, 11:37:11 AM »
Credit Karma and Credit Sesame both switched over to reporting Vantage credit scores a few months back. The scale and the criteria are different than the FICO/FAKO algorithms used previously. Your score likely changed with the changeover.

I used Credit Karma for many years as a way to check the credit report changes, even before they started providing the full report from Transunion and now from Equifax. My score was always 40 or 50 points below a FICO score pulled by a mortgage lender. Part of the issue is that, unlike FICO scores pulled for loans, the Credit Karma algorithm did not group all credit pulls for a mortgage or car loan in a 30 day window as one pull. If you applied with multiple lenders, that would drag down the Credit Karma FAKO score. That they did not group credit pulls for the same product in 30 day windows was clearly stated on the site at the time.

However, my score was always significantly lower than a lender pulled score. The offers that are targeted to you are based on their score, not your actual FICO score for that product and that lender and therefore not your actual creditworthiness. I thought it might be possible that the Credit Karma algorithm was deliberately underestimating scores to get people to apply for lower quality, more expensive loans and credit cards through them.

Given the importance of credit score in consumer borrowing costs, in my opinion these providers of scores should be regulated and audited by the agencies that protect consumers for various loan products. There is just too much conflict of interest in providing a consumer a score that may or may not reflect their true creditworthiness and offering products based on that score.