Why Do I Have Different Credit Scores

Great question I get every now and then, is Dave, when I put my credit on Credit Karma it said I had a 700 credit score. Then you pulled it, and it said it’s 620. What’s the difference? [ ♪ ♪ ] Well, credit scores have been around for about 25 years now. Lenders are typically using credit scores to determine the likelihood of default over the next 90 days. So it’s only a predictive indicator of how likely you are to default on your obligations. So if you have maxed out credit cards or late payments, you’re more likely to default, giving you a lower credit score versus somebody that doesn’t have that situation. Therefore, they’ll have a higher credit score. Now, oftentimes when a lender like me for a mortgage, pulls a credit score, it’s different than Credit Karma, because those sites typically use a different scoring model. They use a scoring model called FICO score 8. Now, the mortgage lender, we normally use FICO score 2, 5, and 4, respective of the different credit bureaus. They each have their different algorithm. Therefore, our credit scores in the mortgage business, are typically lower than they are for a consumer credit counseling, or an auto loan, and things like that. So if you have specific questions, go ahead and reach out to me. Thank you very much. [ ♪ ♪ ]

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