Credit Karma updates every seven days, but if you’re eager to see changes to your credit score, you likely won’t see improvements overnight. Even though Credit Karma updates frequently, your creditors probably won’t be that speedy. In fact, lenders often take around 30 days to report customer activity. That means that even if a business reports a late payment or balance payoff, you won’t see signs of it for several weeks.
What Is Credit Karma?
Credit Karma is a free app that gathers credit information from TransUnion® and Equifax®, then provides that information to customers free of charge. If you join, you’ll also be able to set up alerts to notify you of any changes to your credit report. This means you won’t have to constantly refresh your screen. These alerts can also come in handy if you ever have an episode of identity theft, since you’ll be alerted that something is up with your credit report.
Is Credit Karma Free to Use?
There is no charge to use Credit Karma, yet it’s a thriving company with more than $500 million in revenue. The bottom line is, all those users provide very valuable data about their creditworthiness and financial interests. That data can then be used to create highly personalized offers to each of those customers. Instead of paying for the privilege of using the Credit Karma app, you’ll be delivered customized ads for services like new credit cards and competitive mortgage loans.
How Often Does Credit Karma Update My Credit Score?
Once a week, Credit Karma updates information for each member. After you’ve logged in, you’ll see your current score and, beneath it, the date when your next update will be visible. However, predicting how often you’ll see a change can be difficult, since creditors report to credit bureaus at varying times. Although they generally report once a month, that doesn’t guarantee every creditor will. Even once they report the information, the reporting bureaus can take as long as a week to update your report. Since Credit Karma merely reflects the information that two of the three reporting agencies provide, that means Credit Karma’s information is only as current as the information provided by TransUnion, Equifax and various creditors.
Is the Credit Score on Credit Karma Accurate?
Although Credit Karma has plenty of happy customers, there have been complaints about its accuracy. The biggest issue is that the service only offers scores from two of the three major credit reporting agencies. Most lenders pull information from all three credit reporting agencies, which means with Credit Karma, you may be missing one-third of the total picture. Also, most lenders rely on an applicant’s FICO score, while Credit Karma’s information is based on the Vantage 3.0 scoring model. There are slight variations between the two scoring models, although they use similar criteria. However, the most important piece of information is that if you have a lender pull your credit report, that lender likely will be pulling it based on FICO, which may not exactly mirror what you’re seeing on Credit Karma.
Is It Bad to Check Your Credit Score?
Consumers have long been warned about the damage that credit inquiries can have on their overall score. But credit reporting bureaus aren’t interested in how many times you checked your score. When various creditors check your score, it’s seen as a sign that you’re actively trying to use your credit, which is why you may see a drop. Your own credit inquiries through services like FreeCreditReport.com and Credit Karma are known as soft inquiries, which aren’t seen as signs that you’re applying for credit. You may see soft inquiries on your credit report, but they aren’t factored into your score.
How Often Does a Credit Score Change?
Since creditors usually only report information every 30 days, your credit score may take time to change. You’ll also likely notice, once you start actively monitoring your credit, that negative incidents cycle off your report at varying intervals. So, for instance, if you applied for a new credit card, the hard inquiry that creditor made will probably only stay on your credit for six months, while a defaulted loan will stay on your report for up to seven years.
Monitoring your credit reports can be a great way to pay close attention to how your activities are impacting your overall score. However, since Credit Karma uses a different reporting model than most lenders, don’t rely solely on that score to determine whether your credit is ready to qualify you for a major loan. Instead, consider asking your chosen lender what reporting score they use and if it’s FICO, use a service that lets you see that score.
- Credit Karma: How often does my credit report information update?
- TechCrunch: Credit Karma touts $500 million revenues
- Credit Karma: When do credit card companies report to credit bureaus?
- MyFICO: Get the Score Lenders Use to Evaluate Your Home Mortgage Loan
- Student Loan Hero: How Accurate Is the Credit Score You See on Credit Karma?
- Credit.com: FICO vs. VantageScore: 5 Differences You Should Understand
- Credit Karma: Hard and soft credit inquiries: What they are and why they matter
- Credit.com: How Long Do Things Stay On Your Credit Report?
Stephanie Faris has written about finance for entrepreneurs and marketing firms since 2013. She spent nearly a year as a ghostwriter for a credit card processing service and has ghostwritten about finance for numerous marketing firms and entrepreneurs. Her work has appeared on The Motley Fool, MoneyGeek, Ecommerce Insiders, GoBankingRates, and ThriveBy30.