Why Your Credit Score From Credit Karma Isn't What Lenders See (2024)

That’s because the credit scores provided by free services are considered “educational.” The score that most lenders see is your FICO score, which is calculated differently and often costs money to access.

That’s nothing new, but it appears the internet at large just found out. And as usual, Twitter users have the best response.

So why is your credit score different depending on the source? Here’s a closer look at where credit scores come from, how they’re calculated and which one you should care about.

Understanding The Difference Between FICO and VantageScore

The truth is that you have many credit scores. Some are more important than others, depending on the situation.

Three major credit bureaus collect your credit information: Experian, Equifax and TransUnion. Each gathers your information independently, and not all lenders report information to all three bureaus, which means there can be variations in data among the agencies.

Then there are credit scoring firms, which take the data collected by credit bureaus and apply their own algorithm to come up with a score for each one. FICO is the most well-known and widely used scoring model, as 90% of major lenders rely on those scores when evaluating applicants. When a lender runs your credit, they’ll usually see your three FICO scores from Experian, Equifax and TransUnion.

Then there are “educational” credit scores. These are what you see when you look up your credit score on free sites such as Credit Karma, or through your online banking platform such as Capital One or Chase (some banks provide FICO scores for free, though it’s not as common).

Usually, these scores are provided by VantageScore, a competitor to FICO that is used by some lenders but not nearly as often. For that reason, these scores are usually provided for informational purposes only.

If that weren’t confusing enough, Both FICO and VantageScore also have multiple versions, as well as specialized scores for different industries. However, you don’t need to worry about these variations, in most cases.

“You should think of VantageScore as an educational score and FICO as the credit score a lender would use,” said Kiara M. Martin, owner of Credit With Kiara.

But that doesn’t mean there’s no value in knowing your VantageScore. “Credit scores are highly correlative,” said a Credit Karma spokesperson. “That means if you’re rated a ‘good’ in one scoring model, you most likely have a ‘good’ credit rating in all other models... While there are certain nuances to credit scores, they usually just weigh different factors or time periods differently.”

Plus, many important organizations do rely on VantageScores, including the U.S. Department of Housing and Urban Development, Federal Housing Administration and National Credit Union Administration.

In reality, you shouldn’t get too hung up on whether you’re getting a FICO score or a VantageScore. “Yes, there are differences between the two formulas, but, for the most part, your score should be about the same either way,” said Matt Schultz, chief credit analyst at LendingTree.

“One of the most important things about checking your credit score is looking for major unexpected directional changes,” Schultz said. For example, If your score drops significantly for no obvious reason, that could signal a problem such as identity theft. “That’s something that should be apparent regardless of whether you get a FICO score or a VantageScore,” he said.

It’s also important to understand that since there isn’t just one FICO score or one VantageScore, and major lenders may even have their own proprietary versions of the scores, there’s no guarantee that the credit score you see is the same one your lender will be looking at anyway.

“Your best move is to focus less on your credit score and more on your credit report,” Schultz said. “Your score is just a number grade for what’s on your report, so take the time to check out your report to make sure everything looks as it should.”

If it doesn’t, you can report errors to the credit bureaus and get them fixed.