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Credit Karma Vs. Myfico: The Differences Between Credit Karma And Myfico
Have you ever wondered why Credit Karma and MyFico scores are different? In this article you are going to learn about the two and why you probably would need both.
Credit Karma is free while MyFico has charges
One of the greatest differences is that Credit Karma is free with only a few limitations. You can sign up using your personal information only and get started with no money down and no credit cards required. On the contrary, MyFico has charged. It charges a monthly subscription fee. However, it doesn't have any limitations as a credit card institution.
This difference comes because Credit Karma and MyFico use different algorithms. Credit Karma uses vantage 3.0 system algorithms while MyFico uses fico 8, 9 or 10 algorithms.
Lenders use fico more than vantage 3.0. This is because Vantage 3.0 system algorithm is a guess from what your credit report is showing. Credit Karma only takes a screenshot of your credit report and creates a score based on what your credit report is showing.
Whatever you are showing on your credit report currently, Credit Karma or vantage scoring system will come up with a score that they guess best fits the description of what’s on your credit report. It's a guess, and that's why it is free.
Credit Karma uses two credit bureaus while MyFico uses three credit bureaus
Credit Karma only uses Transunion and Equifax bureaus while MyFico uses Transunion, Equifax and Experian. Using Credit Karma therefore only leaves you in the dark because a lot of institutions and banks only use Experian to pull your credit report.
With Credit Karma, it's difficult to apply for any type of loans or funding because you don’t know what your Experian score or report is. It is hence advisable to use MyFico which will give you an Experian account because Credit Karma will not give it to you.
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Credit Karma allows you to dispute items directly with the back of your office, MyFico does not
Credit Karma has partnered with Transunion to allow you to dispute items online within their software. All you have to do is pinpoint only one item because you cannot dispute multiple items or bulk items at a time.
To go about the credit dispute easily, Credit Approved is software that allows you to do everything yourself. Through it, you can dispute over 150 items that are negative on your credit report for 100 different reasons. Disputing through this software helps you wave any rebuttal you can give the FCRA during the dispute process.
Credit Karma shows credit report of one account while MyFico shows credit reports of multiple accounts
Both Credit Karma and MyFico don’t show account numbers. If you click on any accounts on your credit report, they will not show you any account number even though you need them in the dispute process to put on the letters when you are sending out those dispute letters.
However, Credit Karma will show why your scores go down. You will also be able to see that Credit Karma is giving this account holder accurate information on why the score is going down in different months and for different reasons.
MyFico will show you all the three credit reports. They show you different credit scores for different institutions that you are applying for: the mortgage score, auto score and credit card score.
It is therefore advisable to call an institution and ask them what bank they use for pulling credit before you apply for a home, a car or a big loan. A lot of them use Experian and this will lead you to MyFico and consequently to the Experian report.
MyFico is more expensive and powerful to use while Credit Karma is free and to easy to use
Many lenders use the MyFico algorithm because it shows every description of your credit report for each industry that you can apply to. It also gives you a more accurate description and shows all the numbers which Credit Karma doesn’t. That makes it more powerful and expensive.
Contrary, Credit Karma gives you a full breakdown in an easily simplified form within a back office. It shows all the steps that make up your credit report.
It also shows all the percentages and breakdown which make up the credit reports such as payment history utilization, credit age, inquiry and types of credit. Credit Karma shows where you put all those different entities and what you need to work on.
Even though Credit Karma has a lot of values and is also free, in applying for a large loan, MyFico is ideal because it gives you a detailed description of the credit report in real-time.
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