Credit Karma DOES NOT give you FICO scores! Which is what mortgage lenders use.

Great information to share with your clients that uses Credit Karma. A lot of people do not know that the Credit Karma app is a Vantage Score.

Credit Karma is NOT Free!
Credit Karma makes money off of the personal information you volunteered!
Credit Karma is NOT a credit monitoring site! - They collect your information from the credit agencies to create targeted campaigns based on your personal information which makes Credit Karma an affiliate marketing site!
Credit Karma DOES NOT give you FICO scores! Which is what mortgage lenders use.
Credit Karma provides you with Vantage scores (Not heavily used by lenders)
Credit Karma buys your information for pennies on the dollar, this is how they are able to provide you with updates every 7 days.
Why?... To get you to look at your scores and their AFFILIATE offers! You know, the offers for those credit cards that say you have a fair, good or very good chance of being approved for....
Have you noticed they never say, "You have a bad or poor chance”?
Apply, get denied and now you have an inquiry on your credit profile.
For those of you that are seeing you have a "chance" of getting approved for an American Express ๐Ÿ’ณ think again... You would be surprised to know, American Express only pulls from Experian for credit cards?
Credit Karma DOES NOT give you Experian credit report or scores

While it’s common knowledge that mortgage lenders use FICO scores, most people with a credit history have three FICO scores, one from each of the three national credit bureaus (Experian, Equifax, and TransUnion). 


Credit Karma DOES NOT give you FICO scores! Which is what mortgage lenders use. Which FICO Score is Used for Mortgages?



  • Which FICO Score is Used for Mortgages?

Most lenders determine a borrower’s creditworthiness based on FICO® scores, a Credit Score developed by Fair Isaac Corporation (FICO™). This score tells the lender what type of credit risk you are and what your interest rate should be to reflect that risk. FICO scores have different names at each of the three major United States credit reporting companies. And there are different versions of the FICO formula. Here are the specific versions of the FICO formula used by mortgage lenders:

  • Equifax Beacon 5.0
  • Experian/Fair Isaac Risk Model v2
  • TransUnion FICO Risk Score 04

Lenders have identified a strong correlation between Mortgage performance and FICO Bureau scores (FICO score). FICO scores range from 300 to 850. The lower the FICO score, the greater the risk of default.

Which Score Gets Used?

Since most people have three FICO scores, one from each credit bureau, how do lenders choose which one to use?

For a FICO score to be considered “usable”, it must be based on adequate, concrete information. If there is too little information, or if the information is inaccurate, the FICO score may be deemed unusable for the mortgage underwriting process. Once the underwriter has determined if a score is usable or not, here’s how they decide which score(s) to use for an individual borrower:

  • If all three scores are different, they use the middle score
  • If two of the scores are the same, they use that score, regardless of whether the two repeated scores are higher or lower than the third score

Lenders have identified a strong correlation between Mortgage performance and FICO Bureau scores (FICO score). FICO scores range from 300 to 850. The lower the FICO score, the greater the risk of default.

If it helps to visualize this information:

Identifying the Underwriting Score
ExampleScore 1Score 2Score 3Underwriting Score
Borrower 1680700720700
     

Joel Lobb

Mortgage Loan Officer

Individual NMLS ID #57916

 

American Mortgage Solutions, Inc.

10602 Timberwood Circle 

Louisville, KY 40223

Company NMLS ID #1364

click here for directions to our office

 

Text/call:      502-905-3708

fax:            502-327-9119
email:
          kentuckyloan@gmail.com

 

https://www.mylouisvillekentuckymortgage.com/

 

 
 

 

 
 
Joel Lobb
Senior  Loan Officer
(NMLS#57916)
 
 Company ID #1364 | MB73346
 

text or call my phone: (502) 905-3708
email me at kentuckyloan@gmail.com

The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only. The posted information does not guarantee approval, nor does it comprise full underwriting guidelines. This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the view of my employer. Not all products or services mentioned on this site may fit all people. NMLS ID# 57916, (www.nmlsconsumeraccess.org). USDA Mortgage loans only offered in Kentucky.

All loans and lines are subject to credit approval, verification, and collateral evaluation