< Back to JVM's Blog

Does Credit Karma Lie To You?

Does Credit Karma Lie To You?After my wife Heejin and I moved to Texas, Credit Karma sent me an email with this subject line: “You’re making moves, Jay. Literally.

It reminded me of the Police song in which Sting croons: “With every step you take, I’ll be watching you,” because I definitely felt stalked.

And yes, I had to work in the Police reference because I read on Quora last week that “Every Breath You Take” is the most misinterpreted song in rock music. This is because everyone thinks it is a beautiful and romantic love song, when it is in fact about an obsessed and crazy stalker. 😊

But, in all seriousness, I like it when Credit Karma stalks me because I think it is an excellent service.

Credit Karma is a free credit monitoring service that gives you access to at least two credit bureaus and it alerts you every time anything having to do with your credit looks awry.

It has no effect on my credit, and they do not spam me with too many offers – and I love it!

Does Credit Karma Lie?

But – the question remains – Do They Lie To Me?

And that of course reminded me of this Eurythmics song from the same era: Would I Lie To You?” (OK – I really just wanted to make another boomer song reference).

And – the answer is that Credit Karma does NOT lie, but they do mislead – but they do so very unintentionally.

Consumer Credit Scores Are Not The Same As Mortgage Credit Scores

Credit Karma relies on “consumer debt” credit scoring models (that are used by credit card companies primarily) that are far less stringent than “mortgage” credit scoring models.

Hence, consumer credit scores (like Credit Karma shares) are almost always higher than the credit scores we pull with our credit reports for mortgage lending.

In some cases our scores are 40 to 50 points LOWER than what consumer scoring models report.

This is why when clients tell us: “Oh no… you don’t need to run my credit because my scores are perfect…,” we always explain the above information and tell clients that we actually do indeed need to run their credit.

(We also need to run our own credit reports to run the automated underwriting software that Fannie, Freddie, and other lending entities employ.)

Our Most Viral TikTok Yet!

One of our Marketing Managers heard our Client Advisors explain the above info so often that it inspired her to make our most viral TikTok yet: Credit Karma Is Making Liars Out Of All Of Us.

(And as we all know, everything on the internet is 100% true and should always be taken seriously because we never joke around ever. 😊)

So yes, I love Credit Karma! But, I would never rely on the credit scores it shares when considering my mortgage options.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167