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Posted in Credit Report
Credit reporting is a scam!
I had a home equity line of credit for 10 years with PERFECT payment history. The line of credit was closed by the bank per the agreement (after 120 months). I re-applied and opened a new line of credit with the same lender for the same credit line. In the meantime, I paid all other accounts on time, opened no new accounts, and closed no old accounts. ...yet my credit score dropped 15 points in 4 months!!! What a scam!
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Question By
jfpwatson

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Most Helpful Response
Credit Karma is a business!
Helpful to 49 out of 52 people

Credit karma makes its money off of the credit offers and other services it provides on its website.  The idea is to show a reduced credit score to entice a consumer to apply for one of their affilates credit card offers or services to repair their credit whether it needs it or not.  I relied on Credit Karma for a few months before I got my free annual credit report, I found out that the scores that are supposed to be based on a transuniion credit report are incorrect.  My actual credit scores ranged from 50 to 90 points higher on my actual credit report tan the score given by credit karma.  When asked to explain the difference I was referred to a forum where other people in my situation were discussing the score difference.  They are a for profit business that is looking to make a profit from consumers that are not willing to pay for a real credit score or who do not know that they can get a free credit report from the government.  Be aware the the free annual credit report DOES NOT INCLUDE A CREDIT SCORE.  YOU HAVE TO PAY TO GET A CREDIT SCORE.  The cost for all three credit scores is around $35-$40, a score from one is $15. 

Response by
flacoinohio

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49 People Helped
Helpful to 9 out of 9 people

Well said. Just like Nike, Walmart, or Mcdonald's CreditKarma provides a great service, and is also a for profit business.

The same goes for Transunion, Equifax, and Experian. They are simply businesses.

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Reply by
rmkinghorn

21 Contributions
81 People Helped
Helpful to 2 out of 2 people

This is so true, thanks for the info :-) 

God bless, 

Reply by
VALMARCELIN

1 Contribution
2 People Helped

Thank you...you have just confirmed just about every thing I felt was going on.

Reply by
sndman6986

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0 People Helped
Helpful to 8 out of 9 people

my score dropped 47 points after paying off a student loan for 3000 on credit karma. How does paying off something drop your score and I have not had any inquires on my report. I don.t think they are accurate 

Response by
diamond1208

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Helpful to 4 out of 4 people

It changes the variety of accounts that you have on your bureau.  One of the major factors in determining your score is the variety of accounts that you have.  You should always have a revolving, an installment and either a mortgage or equity line.  That along with your balances and payment history are what make up the risk assessment in calculating your score.

Consumer Debt Center

Cleveland, OH

Reply by
anginfla

4 Contributions
13 People Helped
Helpful to 10 out of 12 people

As soon as you closed your 10 year old perfect home equity credit line it became OLD credit and not a current open credit line. If that was your oldest credit then your score dropped because the length of your credit history was then dropped to the next oldest account. It also lowered the number of positive open accounts you had which would also drop your score.

Response by
merlovespiper

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Helpful to 2 out of 3 people

Thats not the only reason.  The main factor there is the fact that the LENDER closed the account.

Consumer Debt Center

Cleveland, OH

Reply by
anginfla

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Helpful to 9 out of 11 people

Welcome to the magic of credit scoring. Amen.

Credit scoring has nothing to do with income or wealth or assets. It is all about debt, paying debt back and going back into debt. It really is a silly game to maintain the bank's profits.

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Response by
KeesdeWit

325 Contributions
55 People Helped
Helpful to 6 out of 8 people

That also is not true.  Your debt to income ratio and the utilization rate on the cards make up a significant portion of your risk assessment.  So the amount of money you make in connection with the amount of debt you have or can have plays a very big role.

Consumer Debt Center

Cleveland, OH

Reply by
anginfla

4 Contributions
13 People Helped
Helpful to 4 out of 7 people

Since credit scores do not have anything to do with income or assets, I find it INCREDIBLE that people will make business decisions on information that is dubious.

I wanted to increase my credit limit with my American Express card and they said not unless I provided a copy of my TAX return.  I DON"T THINK so.  They are the looser because I use othre cards that provide cash rebates and the DO NOT receive the transaction fees. 

None of the credit card companies derive interest since each account is paid in time to avoid rates that I consider bordering on EXTORTION!

If I'm going to work with someone that wants to abuse me using information based on a credit score, I'll do business with someone else.

Reply by
7CJbW

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protect
Helpful to 2 out of 2 people

What dose Karma do to protect my iformmation like my ss#

Response by
Godto

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Helpful to 4 out of 5 people

registering for CreditKarma is NOT a hard inquiry and will not change your score

Response by
gilliguin

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Helpful to 2 out of 3 people

Credit Karma only reports what is in your Trans Union Credit

File.  You should contact Trans Union.  The old good credit could have been removed because it was no longer being reported by the credit grantors, or you may have had some negative items which turned seven years old and had to be removed.  the rewards 660 is a credit card offered to people with credit problems.  The seven years a late payment stays on your report is from the date of the late payment, it does not matter how old the account is.  

Reply by
rtposcpdny3167

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2 People Helped
Helpful to 4 out of 7 people

my credit score was 782 then went to756  had no change in my accts.then in three months it went to 568 and had no change all good credit it was lost and taken off by credit karma and a seven year old credit card rewards 660  all good credit was taken off the bad one seven years old left on thats wrong this compenty is a rip off 

Reply by
shaggy1418

1 Contribution
4 People Helped
Helpful to 1 out of 4 people

Why don't you learn how to write a sentence?

Reply by
edpine3

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Helpful to 4 out of 5 people

When you applied, you had a hard inquiry. That always drops your score. 

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Response by
hardeight

1739 Contributions
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Helpful to 4 out of 4 people

The score drop could be for several reasons.  The hard Inquiry will affect your Fico(real score)for one full year, but diminishes over time.  Did you have any old accounts age and fall off your report? This could affect your AAoA and lower your score.  Did your revolving utilization ratio to your total credit limit change?  Did you have any accounts that were reporting a $0 balance previously suddenly report a balance?  These are the major ones, not withstanding any negative entries to your report that were not there before.

Reply by
guydiver12

2 Contributions
4 People Helped
Helpful to 2 out of 2 people

I thought about that, but the hard inquiry was back in November and now it's March.  My credit report shows 2 hard inquiries since then - and this dropped my score by 15 points???  Wouldn't an extra 4 months of perfect payment history be worth more than 2 hard inquiries?  My score went from 778 to 763 - still an excellent score but the whole system is just a scam to justify higher rates by lenders.

Reply by
jfpwatson

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Can't say for sure but....
Helpful to 1 out of 1 people

I have an uneasy feeling about the motive of Credit Karma...

My credit score showed an excelent score , yet when I tried to change my mobile carrier from ATT to T MOBILE , I was told by TMOBILE that my credit score was such that I needed to pay an additional deposit if I wanted to open the account with them....

Response by
chyna737

1 Contribution
1 Person Helped
Home Equity Line
Helpful to 1 out of 1 people

Apparently you arent versed in the lines of credit and how they affect your score.  When a Lender closes an account it has a negative impact on you whether or not your payment history is good.  NEVER let a Lender close an account!

Consumer Debt Center

Cleveland, OH

Response by
anginfla

4 Contributions
13 People Helped
Helpful to 2 out of 3 people

I was going to register until i read the crap about it dropping my score for one full year.  Guess nothing is really FREE!

Response by
oakleyp2

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2 People Helped
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