Have you ever checked your credit score and been surprised to see different numbers from different sources? You’re not alone. Many people are confused about why they have multiple credit scores, especially when it comes to FICO scores.
The short response is that Equifax, Experian, and TransUnion are the three main credit bureaus. Every bureau obtains and keeps a copy of your credit report, and based on the data in those reports, each determines your score using a slightly modified version of the FICO scoring model. This may cause your FICO scores from the three bureaus to differ slightly.
But don’t worry, this doesn’t mean your credit is bad or that you’re being penalized. It’s simply a reflection of the different ways that credit information is collected and analyzed
Here’s a breakdown of the reasons why your FICO scores might be different:
- Credit scoring model used: There are several different FICO scoring models, and lenders can choose which one to use. The most common model is FICO Score 8, but some lenders may use older versions like FICO Score 5 or even industry-specific models like FICO Auto Score.
- Score version: Even within the same scoring model, there are different versions. For example, FICO Score 8 has several different versions, each with slightly different weighting factors for different aspects of your credit history.
- Credit bureau: As mentioned before, each credit bureau has its own version of your credit report, which can lead to slight differences in your FICO scores. This is because not all lenders report to all three bureaus, and the information they do report may not be identical.
- Date scores are accessed: Your FICO score can change over time as new information is added to your credit report. If you check your score at different times, you may see different numbers.
- Errors on your credit report: Errors on your credit report can also affect your FICO score. If an error appears on one bureau’s report but not the others, your score from that bureau may be lower.
So, which FICO score matters most?
The good news is that most lenders use FICO Score 8, so that’s the one you should focus on You can get your FICO Score 8 from each of the three credit bureaus for free once a year at AnnualCreditReport.com.
However, if you’re planning to apply for a specific type of loan, such as a mortgage or auto loan, you may want to check the specific FICO score that the lender uses You can usually find this information on the lender’s website.
Here are some tips for improving your FICO scores:
- Pay your bills on time: This is the most important factor in your credit score.
- Keep your credit utilization low: This means using less than 30% of your available credit.
- Don’t apply for too much credit at once: Every time you apply for credit, a hard inquiry is placed on your credit report, which can lower your score.
- Become an authorized user on a credit card with good credit history: This can help you build your credit history without having to open a new account.
- Dispute errors on your credit report: If you find any errors on your credit report, dispute them with the credit bureau.
By following these tips, you can improve your FICO scores and increase your chances of getting approved for the loans and credit cards you need.
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Lenders use your credit score, which is a three-digit figure, to decide whether to approve you for financial products like loans and credit cards.
While credit scores normally range from 300 to 850, it can be difficult to determine which version you are being assessed on during the application process because there are numerous variations, from base scores to industry-specific scores.
It can be challenging to determine what credit score range you fall into and which products you have the best chance of qualifying for when you check your score with your credit card company or on a personal finance website only to discover that it differs on another. Additionally, when a lender obtains your credit score, they might do so from Experian, Equifax, or TransUnion, or they might ask for a particular version that differs from the one you checked.
The majority of credit scores include the same elements, including length of credit history, utilization rate, payment history, number of new inquiries, and range of credit products. However, there may be score differences for a variety of reasons, which CNBC Select breaks down below.
6 reasons why your credit score differs
- Credit scoring model: A variety of models are available to score your credit history. However, FICO or VantageScore are the two primary credit scoring models that are usually used by lenders. Both businesses assess the same primary elements of your credit history, such as your payment history and utilization rate, but they weigh each element differently based on their own formulas.
- Score version: There are numerous credit score variations that are divided into base scores and scores unique to certain industries. Base scores, such as FICO® Score 8 or VantageScore 3. 0, show lenders the likelihood you’ll repay any credit obligation. Industry-specific scores, like the FICO® Auto Score 9, which is used to make auto loan decisions, indicate your likelihood of repaying a particular loan.
- Credit bureau: Information from your credit report, which is obtained from one of the three main credit bureaus (Expperian, Equifax, or TransUnion), is used to calculate credit scores. Your score varies according to the data that each bureau received; this is covered in more detail below.
- Details given to the credit bureaus: Not all of the information about your credit accounts may be given to the credit bureaus. It’s surprising to learn that lenders are not obligated to report to any or all of the three agencies. Even though the majority do, there’s no assurance that the data will be consistent, which could lead to variations in your scores.
- Date scores are accessed: There could be differences if you check your credit score at different times because one of the scores might not be current.
- Errors on your credit report: Any inaccuracies on your credit report may be reflected in your credit score. Your credit score from a report that has errors may differ from one that doesn’t if the errors are limited to one bureau. To protect your credit score, you should dispute any inaccuracies on your credit report as soon as possible.
Why your credit scores are different from each other – How so many FICO, VantageScore scores happen
FAQ
Why do I have multiple different FICO scores?
What is the most accurate FICO Score?
Why are my 3 credit scores so different?
Do you have 3 FICO scores?
Why are my FICO® scores different for the 3 credit bureaus?
In the U.S., there are three national credit bureaus (Equifax, Experian, and TransUnion) that compete to capture, update and store credit histories on most U.S. consumers. While most of the information collected on consumers by the three credit bureaus is similar, there are differences.
Are all credit scores FICO® scores?
Not all credit scores are FICO® Scores. you apply for a loan or credit. Other credit scores, which use scoring formulas different from FICO’s, may not give you an accurate representation of the scores your lender uses when assessing your credit profile. Why are my FICO® Scores different for the 3 credit bureaus?
How many different FICO credit scores can you have?
It’s possible to have 30+ different FICO credit scores depending on the information in your credit reports that’s going into calculating them. FICO 8 and FICO 9, for instance, are widely used in credit decisions, while the newer FICO 10, which incorporates trended data, is used less commonly. FICO Score vs. Other Credit Scores: Which Is Better?
Why is my FICO score different than my credit score?
Your FICO Score is a credit score. But if your FICO score is different from another of your credit scores, it may be that the score you’re viewing was calculated using one of the other scoring models that exist.