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Is Credit Karma Accurate? My experience with Experian Boost, and Credit Update after paying off debt - YouTube
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in this video i'm going to answer the
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question is credit karma accurate
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then i'm going to provide an update on
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my own credit and show you how
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it's increased by over 100 points by
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paying off some debt
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and then lastly i'm going to share my
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experience utilizing
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experian boost you just gotta get
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started
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welcome to my channel i'm harlan d white
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where we're focused on eliminating debt
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and minimizing the if only
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regrets with money on my channel i'm
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currently documenting my journey of
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eliminating almost fifty thousand
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dollars in debt
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and so each week i'll be providing
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updates as well as sharing
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insights on a variety of personal
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finance topics that i'm learning about
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on the way
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topics such as zero-based budgeting
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emergency funds
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how to negotiate your collections today
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we're talking about
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credit so if that's of interest to you
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definitely make sure you
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hit that subscribe and notifications
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bell my inspiration for today's video is
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actually i was watching one of angie's
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videos
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a month or so ago and he was talking
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about his 800 credit score
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and made a caveat that it came from
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credit karma
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and how some people may try to discount
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it which caused me to want to look into
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why that's the case and so
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here we are today what is credit karma
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well credit karma is a free credit
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monitoring service where in exchange for
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giving you a free credit score
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they're able to use your information to
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sell targeted advertisements
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to other companies so let's start off
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with where do your credit scores come
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from
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well they come from your credit history
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which are maintained by the three
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different credit bureaus
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transunion equifax and experian and
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right off the bat the first of two
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considerations comes to mind
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when looking to answer the question is
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credit karma accurate
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because credit karma only uses two of
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the three credit bureaus
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they utilize transunion and equifax the
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issue with this is that not all
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lenders report to all three credit
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bureaus and like in my case you may have
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items on one credit report that don't
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show up on the other credit reports
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and therefore if you're just looking at
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your credit karma the information that
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you have
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would be incomplete the second
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consideration to think about when
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looking to answer the question is credit
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karma accurate
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is what is your purpose for utilizing
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credit karma
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something that i never thought about is
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that potentially each of us could have
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hundreds if not thousands of different
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credit scores
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according to veronica herrera director
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of product solution at experian
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there are hundreds of different scoring
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models used by lenders
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and there are thousands of more custom
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scores the two most popular credit
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scoring models are
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fico and vanish score who both use 300
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to 850 scoring ranges
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however there's a number of variations
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for both scoring models
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now starting with vanish score it was
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actually developed by the three credit
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bureaus transunion
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equifax and experian in 2006 to compete
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with fico
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the two most recent versions of vanished
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score is vantage score 3.0 which was
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developed in 2013
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and that's also the version that credit
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karma uses along with a number of other
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companies out there
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and then there's vantage score 4.0 which
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was developed in 2017
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which is currently still less popular
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than the 3.0 version
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whereas fico was first developed in 1989
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and fico also has a number of different
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versions the two latest being
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fico number eight and fico number nine
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and according to
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credit scoring website myfico fico is
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used by
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more than 90 percent of the top lenders
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so although through the years
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vanish score is becoming more popular as
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detailed in
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oliver wyman's 2019 study where he saw
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a 20 year-over-year increase from 2018
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to 2019
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with the used advantage score it's still
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not the industry standard
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and there's also a number of other
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differences between fico and vantage
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score
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such as how they weight things in your
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credit report
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for example fico weights your payment
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history at 35
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whereas vantage score awaits your
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payment history at 40 percent
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they also have different scoring ranges
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where uh 661 may be good
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in vantage score or 661 is considered
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fair in fico and even how they handle
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collections is going to be very
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different
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you know either whether or not they
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discount medical debt or whether or not
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they look at
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things under 100 is really going to be
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dependent on which credit score that
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you're looking at
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so to answer the question is credit
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karma accurate
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yes it's accurate however because they
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utilize
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vanish score they are not using the
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industry standard
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when it comes to scoring models and also
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it's going to be really heavily
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dependent on what is your use
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of credit karma because if you're using
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that score to base
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what you may qualify for let's say an
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example a mortgage loan
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you probably want to make sure that you
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pull your fico
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as well just to make sure you're not
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caught off guard however
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credit card can still be a very useful
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tool for monitoring your credit
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to make sure that nothing shows up on
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your credit that shouldn't be there
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and also to track the trajectory of
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whether or not your credit is going up
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or down credit karma can still be a good
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good indication of that
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and one of the things i like to do as
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well is to also use the experian app
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and supplement the credit karma that way
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i can see information
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from all three credit bureaus all right
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so next part of this video i do want to
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jump into
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giving a credit update if you have not
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seen any of my other credit updates
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i will warn you right off the bat that
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my credit is not very good
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in fact before i started posting my
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youtube videos to my facebook
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i had to give myself a heart to heart i
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was like harlan
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you are not your credit score you
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are not your debt and for the most part
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it's true right i can't change anything
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i did in the past however
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i can influence the future by doing what
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i need to do each and every single week
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to move forward all right so let's jump
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into the details
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so since i started tracking my credit
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late
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march early april my
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transunion has increased by 112 points
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my equifax has increased by 105 points
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and my experience has increased by 58
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points
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the interesting thing about that is that
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my higher scores
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are for my advantage score versus the
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experian which is a fico score
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so my transunion score is 637 my equifax
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score is 637
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and my experience score is 569.
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however as i was looking at this in
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preparation for this video i did notice
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that my experian
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still had a collections account on that
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credit report
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that had already been removed my other
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two credit reports
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so just last week i placed a dispute to
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get that removed
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and so once that's removed i'll see
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whether or not
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the fico score comes anywhere close to
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the vantage scores
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all right and so to give you example on
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how my score has been increasing over
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the last month and a half or so
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i'm going to just focus on the
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transunion and quickly run you through
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the numbers
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so august 13th my transunion was 553
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and it it had increased at that point by
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six
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points because on my credit report i can
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see that
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my credit card number one was settled on
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my account
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so the cool thing about credit karma is
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that it will show you
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notes as far as why your credit score
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increased
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and then on august 28th my transunion
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score increased by 39 points
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and that's because credit card number
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one was removed
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from my credit report my installment
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loan was settled on my credit report
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my credit card number four showed a
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balance reduction on my credit report
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and because of those those factors it
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increased by 39 points
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and if you jump to september 20th my
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score increased by another 38 points and
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that was because my credit card number
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four
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had settled and lastly jumped to
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september 26 my score increased by
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another three points
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and that was because i reduced credit
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card number three by five hundred
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dollars
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all right so the last topic i want to
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hit before giving a very quick update on
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my where i'm at on my debt free journey
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is my experience utilizing experian
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boost
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if you don't know experian is the only
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one of the three credit bureaus
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that allows you to put non-traditional
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information
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in your credit history and so basically
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the way that it works you go onto the
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experian app or the experian website
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and there's a section around the
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experian boost you click it and it gives
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you an option to
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add an account so a checking account or
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credit card account
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and once you add that account experian
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searches through that account and looks
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to identify
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either utility bills or telecom bills
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and if they're able to find accounts
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that have at least
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three consecutive months of payments
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then they will ask you whether or not
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you want to add that account to experian
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boost
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so for me i had two accounts that came
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up and that was my
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one of my utilities accounts and also my
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cell phone account
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and since i recently moved i decided not
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to add that
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utility account to my experian boost
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however i did add my cell phone bill
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to my experian boost and right off the
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bat my
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experian credit score jumped by 21
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points
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and then last week i was going back into
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my experience and looking at it
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and that's when i noticed that there was
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something still on my experian that was
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not on my other two
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credit reports and so i decided to go
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ahead and add the utility accounts just
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to see what would happen
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and so i went ahead and added the
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utility account as well
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and my score increased by another 22
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points so now i'm waiting to see what
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happens once the
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utility account drops off and whether or
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not my credit score will drop back down
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but i definitely want to share this
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information because the experian boost
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at least in my case maybe it's just
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because i have poor credit
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it actually did work and so it was
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pretty
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simple and straightforward and so if
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you're looking to increase your experian
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credit score that's one option and
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lastly real quick i'm going to provide
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an update on where i'm at in my debt
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free journey
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i have not made any payments since my
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last video so
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my current outstanding debt is twenty
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eight thousand six hundred and seventeen
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dollars
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and the total amount that i've reduced
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my debt by since may of 2020
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is twenty one thousand fifty two dollars
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until next time
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