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Question By
jfpwatson

4 Contributions
2 People Helped
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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Most Helpful Response

Credit Karma is a business!

Helpful to 99 out of 112 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. 

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Reply by
rmkinghorn

21 Contributions
108 People Helped
Helpful to 16 out of 29 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.

Reply by
VALMARCELIN

1 Contribution
11 People Helped
Helpful to 11 out of 11 people

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

God bless, 

Reply by
sndman6986

3 Contributions
5 People Helped
Helpful to 5 out of 9 people

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

Reply by
Oscarlove

1 Contribution
0 People Helped

I used credit karma's credit "stimulator" and it showed an outrageous jump in my credit score if I JUST TOOK OUT ANOTHER credit card loan.  This doesn't help.  It's your debt to income ratio that affects credit MORE.  In fact, a new open account of revolving credit will DECREASE your credit score.  Also, my credit score was almost 100 points higher than credit karma was reporting when I went to take out a home loan.  Which was good.  But the credit "stimulator" kept telling me a new credit card would jump my score nearly 40 points.  In fact, it will lose you points.  Use it for a tool to check your accurateness, and THAT'S it!

Reply by
Renee0000

1 Contribution
0 People Helped

I paid off my capital one credit card a month ago and still showing I owe payments I need and thought that you would of been on top **** it's hurtin my chance d to pu rg chase home

Reply by
liberty82582

1 Contribution
0 People Helped

I wish I would have seen this sooner! I was looking for somewhere to "warn" people myself. I have been working extremely hard to raise my credit score for several years. Last summer the difference between the actual report and my creditkarma report was around 40-50 points so I thought not that big of a deal. HOWEVER recently it keeps dropping like 30 points a month so I started checking more into it. It said my score was "fair". Well I called a credit officer for help and when they ran my report it was well over 100 points higher and in the top range. I just got a card for 7% interest which according to Creditkarma I wouldn't have qualified for at all. The only thing this site is good for is seeing what's on your report. 

Reply by
pearl1213

4 Contributions
3 People Helped

The scores they report are highly inaccurate. Not worth visiting the site.

1 Contribution
2 People Helped

Credit Karma massages the scores.

Helpful to 2 out of 2 people

I was skeptical of Credit Karmas scores as they continually had  gone down. My bank cards reports showed a different picture.  I paid to get my real FICO score from Equifax. Credit Karma. Credit Karma score shows I have a 665 when in fact it's well into the 700's. When they quit the scam routine I might consider them a viable reporting agency. For now, they're just a money making outfit reporting diiferentiating information to get you to buy.

2 Contributions
1 Person Helped

SCAMMERS RUN WILD!

Helpful to 1 out of 1 people

YES IT IS!  We should get together and start a class action suit against them all!  this is a bunch of BS!  FED UP!!!

4 Contributions
36 People Helped

Home Equity Line

Helpful to 10 out of 14 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

Reply by
mobo96

3 Contributions
2 People Helped

I just payed off a loan and I noticed the lender closed the account (accorning to Credit Karma) and my score dropped 20 points. They have never done that before. If I find out creditkarma is offering up false information there may be something I can do about it, like report them for scamming me.

1 Contribution
5 People Helped

Can't say for sure but....

Helpful to 5 out of 5 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....

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Reply by
EddyTX

1538 Contributions
3379 People Helped
Helpful to 5 out of 5 people

Did you ask what score they used? 

Often phone companies never even check credit scores. If they did you would have the option to get a free copy of your report, and they would have to give that to you in writing. 

1 Contribution
19 People Helped

Helpful to 19 out of 24 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.

Reply by
anginfla

4 Contributions
36 People Helped
Helpful to 9 out of 12 people

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

Consumer Debt Center

Cleveland, OH

3 Contributions
18 People Helped

Govt Doesn't Recognize Credit Karma

Helpful to 11 out of 14 people

the US govt only recommends  www.annualcreditreport.com  not Credit Karma! 

1 Contribution
15 People Helped

Helpful to 15 out of 18 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 

Reply by
anginfla

4 Contributions
36 People Helped
Helpful to 8 out of 9 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

1 Contribution
7 People Helped

Helpful to 7 out of 8 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!

Reply by
Quinn33

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

Im glad I read these posts before giving my ss# to this scam site.

Top Contributor
327 Contributions
93 People Helped

Helpful to 15 out of 17 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.

Reply by
7CJbW

1 Contribution
12 People Helped
Helpful to 12 out of 16 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
anginfla

4 Contributions
36 People Helped
Helpful to 9 out of 12 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

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