How Accurate is CreditKarma's FICO Score Model?

Quick answer: Not very.

I'm running into more and more customers with a 785 "credit score" from Credit Karma, only to get a 750 credit score on our Residential Mortgage Credit Report (RMCR). Customers are expecting best rates and terms because Credit Karma says their score is higher but experience a .25% rate push once their real scores are in hand. Why such a wide differential between score models? Here's a solid article on how these scores are generated and how they relate to the scores lenders use to price loans:

[url]http://www.investopedia.com/articles/personal-finance/103015/are-credit-karma-scores-real-and-accurate.asp[/url]

The bottom line - use Credit Karma to get an indication of what your credit might look like in a general sense and don't expect those scores to mirror the ones lenders use.

My .02c

Soylent Green Is People.

This is true, my actual credit scores when they were run by lenders were about 2-3% lower than what it showed one credit karma. 

Doesn't Credit Karma just provide TransUnion and Equifax scores?  Are the scores from these agencies also lower than RMCR?

What is the source of the RMCR, is it a different algorithm than the ones used by the major bureaus or do they use one specific source?

RMCR providers are in essence aggregators of data. They can make immediate adjustments to the credit profile being used in many, but not all cases, for reports used by mortgage providers. First American CREDCO is one of them.

Think of it this way:

Credit Karma's Vantage Score FICO might be 741

Equifax's FICO filtered through a mortgage prism may be 739.

CREDCO uses the Experian FICO score, along with TransUnion's and Equifax's mortgage tweaked FICO version in their report.

The main difference is that CK uses a score model that's so general in nature it's not useable. Same for the scores that Discover Card or BofA offer their customers. It's a starting point, but not something lenders (Auto, Boat, Commercial, Mortgage) will use when underwriting a loan or pricing out a 30 year fixed rate.

My .02c

More on this here:

http://www.housingwire.com/articles/39658-cfpb-fines-experian-3-million-for-lying-about-consumers-credit-scores