It’s not unusual for consumers to be baffled by the fact that credit scores from consumer finance websites like Credit Karma are different from what their lender pulls. Micah Curtis explains why that happens.

Ever heard a consumer say: “I had much higher credit scores on Credit Karma than what you’re pulling right now, (insert lender’s name here). Why is that? Did you just drop my score? Why are the mortgage scores so much lower?”

This is a very common conversation between lenders and their customers across the nation. Tune in as Rick Guerrero sits down with Micah Curtis, regional director at Home Loans Assist, to break down why consumers might see so much variance in scores from Credit Karma to a lender’s pull. Here are a few of the key takeaways:

  • There are different FICO algorithms used to calculate consumers’ scores.
  • Websites like Credit Karma don’t use a FICO scoring model. Instead, they use a VantageScore model.
  • On average, these scores will be 40 to 60 points higher than what a loan originator or a banker will see because, as Curtis mentioned, “the algorithms used in the mortgage industry are completely different.”
  • Factors like late payments or collections are weighted differently in the mortgage industry versus a consumer finance website like Credit Karma.
  • It’s almost important to note that websites like Credit Karma aren’t trying to give consumers loans or assess risks. In addition, Credit Karma offers a snapshot of your credit score based on only two years of spending behavior.

Rick Guerrero is the Director of Branch Sales and Strategic Partnerships at US Mortgage Corp. You can follow him on Facebook or connect with him on LinkedIn.

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×