Explanation of free credit scores

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Conch55
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Explanation of free credit scores

Post by Conch55 » Mon Jun 11, 2018 4:25 pm

As many others, I have been using some of the credit score reporting tools offered by credit cards, banks, Credit Karma, etc. While I appreciate using the tools I don't understand the fluctuations I see in the reports. I am retired with frozen credit and consistent spending habits but the scores seem to move around more than I would expect. I don't have many accounts on which my credit score is based but swings occur regularly. Seems odd to me but maybe I'm missing something. Can someone shed some light on this?

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GoldStar
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Re: Explanation of free credit scores

Post by GoldStar » Mon Jun 11, 2018 4:31 pm

How big is the fluctuation?
If you are using credit cards and don't have the same exact balance every month on every card your credit utilization ratio is changing which would cause a small fluctuation.

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dm200
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Re: Explanation of free credit scores

Post by dm200 » Mon Jun 11, 2018 4:48 pm

Conch55 wrote:
Mon Jun 11, 2018 4:25 pm
As many others, I have been using some of the credit score reporting tools offered by credit cards, banks, Credit Karma, etc. While I appreciate using the tools I don't understand the fluctuations I see in the reports. I am retired with frozen credit and consistent spending habits but the scores seem to move around more than I would expect. I don't have many accounts on which my credit score is based but swings occur regularly. Seems odd to me but maybe I'm missing something. Can someone shed some light on this?
I do this as well - but the ups and downs seem to be things I can understand and explain.

The ones I use generally have the parts broken down and show how good or bad each part is. My guess is that there may be fluctuations in credit card balances and per cent of utilization change for you.

BeneIRA
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Re: Explanation of free credit scores

Post by BeneIRA » Mon Jun 11, 2018 4:53 pm

Conch55 wrote:
Mon Jun 11, 2018 4:25 pm
As many others, I have been using some of the credit score reporting tools offered by credit cards, banks, Credit Karma, etc. While I appreciate using the tools I don't understand the fluctuations I see in the reports. I am retired with frozen credit and consistent spending habits but the scores seem to move around more than I would expect. I don't have many accounts on which my credit score is based but swings occur regularly. Seems odd to me but maybe I'm missing something. Can someone shed some light on this?
The free ones, Credit Karma, Capital One, etc use Vantage 3.0, which is not FICO. Virtually everyone uses a different flavor of FICO to determine credit worthiness, but it is expensive for a service like a Credit Karma to use, so they use Vantage 3.0. I would put very little stock in these scores. I have access to various FICO scores as well and while they can sometimes be close, oftentimes, they have no basis in reality. They are very sensitive whereas FICO is not. My score jumps all over the place. I check FICO and it may have moved one, maybe two points. Use them for the credit reports, not the score unless it is to get a general idea.

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dm200
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Re: Explanation of free credit scores

Post by dm200 » Mon Jun 11, 2018 5:00 pm

BeneIRA wrote:
Mon Jun 11, 2018 4:53 pm
Conch55 wrote:
Mon Jun 11, 2018 4:25 pm
As many others, I have been using some of the credit score reporting tools offered by credit cards, banks, Credit Karma, etc. While I appreciate using the tools I don't understand the fluctuations I see in the reports. I am retired with frozen credit and consistent spending habits but the scores seem to move around more than I would expect. I don't have many accounts on which my credit score is based but swings occur regularly. Seems odd to me but maybe I'm missing something. Can someone shed some light on this?
The free ones, Credit Karma, Capital One, etc use Vantage 3.0, which is not FICO. Virtually everyone uses a different flavor of FICO to determine credit worthiness, but it is expensive for a service like a Credit Karma to use, so they use Vantage 3.0. I would put very little stock in these scores. I have access to various FICO scores as well and while they can sometimes be close, oftentimes, they have no basis in reality. They are very sensitive whereas FICO is not. My score jumps all over the place. I check FICO and it may have moved one, maybe two points. Use them for the credit reports, not the score unless it is to get a general idea.
Karma is the lowest for me - BOTH the Equifax and Experian data.

The free discover one is higher and is close (but a little different) to the discover score on our monthly bill.

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Re: Explanation of free credit scores

Post by nisiprius » Mon Jun 11, 2018 6:15 pm

I wouldn't fuss about it too much. My Capital One Creditwise score (said to be "VantageScore 3.0" from Transunion) fluctuates for no obvious reason.

I rather suspect they deliberately include what are essentially sources of random noise so that the score will fluctuate--so that the people they sell the score to will believe they're getting their money's worth.

And don't think that you're getting to see your "real" score. There isn't any such thing. Each credit bureau offers a smörgåsbord of different scores. There isn't any "FICO score," for example; FICO offers forty-nine different scores. The chances that any lender is actually using the same score you are seeing is small.
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Re: Explanation of free credit scores

Post by 2015 » Mon Jun 11, 2018 6:53 pm

Seems every CC is offering a free FICO score these days. Mine bounces around well above 800 but I really don't care as I don't ever intend to use credit. My credit score did increase after I began chasing CC sign up bonuses, but who cares?

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Rick Ferri
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Re: Explanation of free credit scores

Post by Rick Ferri » Mon Jun 11, 2018 7:00 pm

The free ones on Crefit Karma are not updated often either. I paid off a bank loan 3 weeks ago and it’s still showing today.
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Re: Explanation of free credit scores

Post by Bogle_Bro » Mon Jun 11, 2018 7:20 pm

They can be very close or 100 points off

They are best used for monitoring the info... Not the score.

Source- Im a lender who has pulled over 1000 consumer credit reports in the last year...

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Re: Explanation of free credit scores

Post by AlwaysWannaLearn » Mon Jun 11, 2018 8:05 pm

2015 wrote:
Mon Jun 11, 2018 6:53 pm
Seems every CC is offering a free FICO score these days. Mine bounces around well above 800 but I really don't care as I don't ever intend to use credit.
+1. Same boat here. If it's well above 800 (as it should be), I don't give a whit about minuscule differences in the methodologies used by those providing the scores.

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Re: Explanation of free credit scores

Post by grabiner » Tue Jun 12, 2018 8:08 pm

Conch55 wrote:
Mon Jun 11, 2018 4:25 pm
As many others, I have been using some of the credit score reporting tools offered by credit cards, banks, Credit Karma, etc. While I appreciate using the tools I don't understand the fluctuations I see in the reports. I am retired with frozen credit and consistent spending habits but the scores seem to move around more than I would expect. I don't have many accounts on which my credit score is based but swings occur regularly. Seems odd to me but maybe I'm missing something. Can someone shed some light on this?
First, make sure you are comparing the same scoring model. My credit union switched its free score from FICO 8 to FICO 9, and my score went way up; the FICO 8 was lower than my VantageScore 3.0 from Credit Karma, while the FICO 9 was higher. None of these mean anything about my credit.

The problem with most free credit scores is that you don't get reason codes which explain the main reasons why your score is lower. (Credit Karma's scoreboard does not do this; it summarizes each of the factors into a single numbers.) If you get a credit report because you are denied credit, you will get actual reason codes.

The most likely reason for variations is the number of accounts with balances. On Credit Karma's old Trans Union Score, I saw a big drop in my credit score when an old account aged off my report, causing me to go from having balances on three of six accounts to three of five. The next month, I paid off my JCPenney card, going to balances on two of five accounts, and my score went back up.

The individual balances also make a difference, even if they are low. On the old Credit Karma VantageScore 2.0, my score fell by one point for every $100 charged.

I see both of these effects on Credit Karma with a VantageScore 3.0, but they aren't very large; my score changes by a few points each month as the amount owed varies and the balance is spread across two cards or three.
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Re: Explanation of free credit scores

Post by tev9876 » Wed Jun 13, 2018 8:21 am

Rick Ferri wrote:
Mon Jun 11, 2018 7:00 pm
The free ones on Crefit Karma are not updated often either. I paid off a bank loan 3 weeks ago and it’s still showing today.
Credit Karma updates your score weekly (if you log in). Credit Sesame is monthly. You will get alerts (new accounts, inquiries, etc.) in close to real time if these events occur. The account still being there has noting to do with them, but with the bank or credit bureau. Your bank has probably not reported the account closure to Equifax/Experian/TransUnion yet. It is normal for it to take weeks for new accounts to appear or closed accounts to update. Each bank does it on their own schedule, but my updates generally happen around the normal statement date.

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dm200
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Re: Explanation of free credit scores

Post by dm200 » Wed Jun 13, 2018 10:09 am

Rick Ferri wrote:
Mon Jun 11, 2018 7:00 pm
The free ones on Crefit Karma are not updated often either. I paid off a bank loan 3 weeks ago and it’s still showing today.
I don't think that is because of Karma - but when your bank reports to the credit bureaus. Usually reporting is done once a month. Karma uses the Equifax and Experian credit bureau information - then applies a calculation/model.

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Re: Explanation of free credit scores

Post by kaeltor » Wed Jun 13, 2018 11:13 am

Bogle_Bro wrote:
Mon Jun 11, 2018 7:20 pm
They can be very close or 100 points off

They are best used for monitoring the info... Not the score.

Source- Im a lender who has pulled over 1000 consumer credit reports in the last year...
Where do you recommend to get a free FICO score?

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Re: Explanation of free credit scores

Post by Earl Lemongrab » Wed Jun 13, 2018 11:20 am

When my home-equity loan ran out at PenFed, my Transunion 08 score as reported by Discover and BOA reflected that immediately (downward). The Experien score from Amex didn't really show any change.
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Re: Explanation of free credit scores

Post by Bogle_Bro » Thu Jun 14, 2018 9:08 pm

kaeltor wrote:
Wed Jun 13, 2018 11:13 am
Bogle_Bro wrote:
Mon Jun 11, 2018 7:20 pm
They can be very close or 100 points off

They are best used for monitoring the info... Not the score.

Source- Im a lender who has pulled over 1000 consumer credit reports in the last year...
Where do you recommend to get a free FICO score?
with the caveat that its technically "vantage", not fico... I vote credit karma.

the credit karma app has a really clean interface & is reliable for weekly alerts on late payments/credit inquiries/collections/new accounts.

The scoring model is questionable, and pretty much useless.... but since all the info they base it on & share with you is pulled directly from your equifax & transunion reports, it gets the job done.

For a REAL & FREE FICO SCORE... anytime you apply for credit you should get a notice in the mail of what your fico score was when they ran it.

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Re: Explanation of free credit scores

Post by takeshi » Fri Jun 15, 2018 9:16 pm

Conch55 wrote:
Mon Jun 11, 2018 4:25 pm
Seems odd to me but maybe I'm missing something. Can someone shed some light on this?
What are you expecting? If you don't understand the tools your expectations may be off. What amount of fluctuation are you seeing? Scores will vary to a degree with normal activity.

You might want to consider the relevance of the scores you're getting to the creditors that you use and intend to apply with. Chances are your creditors aren't using the VantageScores you're referencing for credit decisions. If that's the case, I wouldn't advise worrying over the behavior of irrelevant scores.
kaeltor wrote:
Wed Jun 13, 2018 11:13 am
Where do you recommend to get a free FICO score?
Discover's ScoreCard site will provide an Experian FICO 8 to anyone that signs up.

Not sure of other free options. Most of the other free options that I'm aware of are provided by creditors to existing customers. Discover gives cardholders a TransUnion FICO 8. American Express gives cardholders an Experian FICO 8. NFCU and PenFed give an Equifax FICO 9. There are a number of others I don't recall off the top of my head.

I'd really recommend focusing on report data and understanding the typical impact of data in the report versus focusing on a number. You want to know where you stand with all 3 of the major CRA's. Getting a free FICO means you're only looking at 1 of the 3 CRA's.
nisiprius wrote:
Mon Jun 11, 2018 6:15 pm
The chances that any lender is actually using the same score you are seeing is small.
If one is randomly picking a score and assuming it to be relevant to a given creditor/product, yes, that would be the case. However, It is certainly possible in many cases to see the same score that the creditor would use in its decision provided that one knows which model & CRA is used for the creditor/product and that specific model/CRA combo is readily available.

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