We get this question asked all the time. A lot of consumers are utilizing Credit Karma and assuming that the score they get from them is their universal credit score for homes, cars, and credit cards. Once they find their true mortgage credit score, they are appalled and assume that Credit Karma has different information than what the loan officer pulled. However, the information that was pulled by Credit Karma is the same that their mortgage loan officer pulled….the only difference is the algorithm being used. Credit Karma utilizes a Vantage scoring model, while the mortgage industry utilizes three FICO algorithms: Beacon 5.0, Classic04, FICO V2. The Vantage algorithm being used by Credit Karma is typically 50 points or higher than a mortgage FICO™ score,
Now comes a curveball. Why is my FICO™ score on my credit card app say it is different than my mortgage FICO™ score? The reason is most credit cards are using a FICO 8 credit score which is typically 60 points or higher than a traditional mortgage FICO. The reason being is a $1,000 credit card is much less risk than a $200,000+ mortgage. The mortgage FICO™ scores are much more strict than the credit card and auto FICO™ scores. Auto FICO scores are now going up to 1000 while mortgage FICO scores only go up to 850.
It is super confusing because there are so many algorithms. However, it doesn’t matter what mortgage company pulls up your credit report….it will always be the same whenever you are trying to buy a home. So don’t expect to find a mortgage company that will have your Credit Karma score.