Keeping track of your credit score is important. You probably want to know your credit score before applying for a credit card, auto loan, or other kind of credit.
But with all of the sites offering credit scores these days, which ones can you trust?
Lets go through the types of credit scores. Ill explain why they can look so different, along with where you can get your scores for free.
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Keeping tabs on your credit score is crucial, especially before applying for loans, credit cards, or other forms of credit. But with the abundance of credit score providers these days, confusion can arise when you see different scores from different sources.
One common scenario is the discrepancy between the credit score you see on your Chase Credit Journey and the one you see on Experian. This can be unsettling, leaving you wondering which score is accurate and what’s causing the difference.
Chase Credit Journey vs. Experian: Understanding the Score Discrepancy
The key to understanding the score difference lies in the type of score each platform uses. Chase Credit Journey utilizes VantageScore 3.0, while Experian provides a FICO score. While both are credit scoring models they differ in their methodologies and the information they consider.
FICO vs. VantageScore: Key Differences
- Information Used: FICO considers a broader range of information, including your payment history, amounts owed, length of credit history, credit mix, and new credit. VantageScore focuses more on your payment history and amounts owed, with less emphasis on other factors.
- Scoring Range: FICO scores range from 300 to 850, while VantageScore ranges from 300 to 850.
- Industry Usage: FICO scores are the industry standard, used by most lenders when making credit decisions. VantageScore is gaining traction but is not as widely used as FICO.
Why Your Scores Might Differ
Several reasons can contribute to the difference in your Chase Credit Journey and Experian scores:
- Different Scoring Models: As mentioned earlier, the use of different scoring models (VantageScore vs. FICO) is a significant factor.
- Information Discrepancies: The credit bureaus might have slightly different information about your credit history, leading to variations in your scores.
- Timeliness of Updates: Credit scores are based on the most recent information available. If your Chase Credit Journey score hasn’t been updated recently, it might not reflect your latest credit activity.
Which Score Should You Trust?
While both scores provide valuable insights into your creditworthiness, the FICO score is generally considered more reliable by lenders. This is because FICO scores are the industry standard and are used by most lenders when making credit decisions.
What You Can Do
- Monitor Your Credit Reports: Regularly check your credit reports from all three major bureaus (Experian, Equifax, and TransUnion) to ensure accuracy and identify any potential errors.
- Understand the Scoring Models: Familiarize yourself with the differences between FICO and VantageScore to interpret your scores more effectively.
- Focus on Improving Your Overall Credit Health: Regardless of the specific score you see, focus on improving your overall credit health by making timely payments, keeping your credit utilization low, and managing your debt responsibly.
Additional Resources:
- The Points Guy: Understanding credit score differences: https://thepointsguy.com/guide/understanding-credit-scores-different/
- Experian: Credit score factors: https://www.experian.com/blogs/ask-experian/credit-education/score-factors/
- VantageScore: Understanding your credit score: https://www.vantagescore.com/resources/understanding-your-credit-score
Remember, your credit score is a dynamic number that can change over time. You can work toward raising your score and getting better terms on loans and credit cards by being aware of the variables that affect it and taking action to maintain your credit.
Understanding the different types of scores
Not all credit score systems are created equal. Lets look at an example before talking about the types of scores.
The Points Guy himself, Brian Kelly, was shocked to see his “Poor” score of 656 on Chase Credit Journey last week. (Screenshot from chase. com).
He immediately checked his score from his Barclays account. The score of 791 was more in line with his expectations and 135 points higher than what Chase displayed. (Screenshot from barclaycardus. com).
So whats the difference? Barclays uses a FICO score — the score most lenders use. Chase Credit Journey uses VantageScore 3. 0® by Experian. While its a product from one of the three main credit agencies in the U. S. It is distinct from a FICO score, which is what lenders use when they obtain your credit report (the other two are TransUnion and Equifax).
As you will see, some estimates are better than others.
Moreover, the credit agency your score comes from will make a difference. Your score from all three agencies won’t always be exactly the same because each agency may have access to different information. For instance, you might receive different scores if you applied for a card from an issuer that only reported your application to TransUnion and not to Equifax or Experian.
Differences between FICO and VantageScore
Credit Karma, which uses VantageScore 3.0, has a full page explaining the differences in the scoring models.
The key takeaway is this: Roughly 90% of lenders in the U.S. continue to use your FICO score (though an industry-specific version for that specific type of credit), and the way your score is calculated between FICO and VantageScore is not the same. The information they use and the weight assigned to each item is different in these scoring models.
As long as you recognize that there’s a good chance the two score types won’t ever match, keeping an eye on your score can be beneficial. (Screenshot from americanexpress. com).
Based on Brian’s observations, VantageScore scores are 100 points lower than FICO-based scores, which are typically utilized by lenders. This is because the scores are composed in a different way.
However, not everyone will experience such large differences between their FICO and VantageScore numbers. My VantageScore is 41 points lower than my FICO score, which is still lower than what Brian observed.
Do these score differences matter? It depends. In theory, a lender’s score is the only one that counts when determining whether to grant you credit. If, however, your credit score significantly changes, it might be a sign of something else, such as late payments, unpaid bills, someone else obtaining credit in your name, etc. — that needs your attention.
It can be perplexing to see such a stark disparity in scores between websites, so what should you do?
FICO Score vs Credit Score vs Credit Karma (Why Are My Credit Scores So Different?)
FAQ
Is Experian on Chase accurate?
Why is my credit score different than Experian?
Why is my FICO and Chase credit score different?
Is Experian or credit score more accurate?
Why are credit scores different?
However, there may be score differences for a variety of reasons, which CNBC Select breaks down below. Credit scoring model used: There are several models out there for scoring your credit history. But typically, lenders use one of the two main credit scoring models — FICO or VantageScore.
What’s the difference between Barclays & Chase credit journey?
So what’s the difference? Barclays uses a FICO score — the score most lenders use. Chase Credit Journey uses VantageScore 3.0® by Experian.
What credit score does Chase credit journey use?
Chase Credit Journey uses VantageScore 3.0® by Experian. While it’s a product from one of the three main credit agencies in the U.S. (the other two are TransUnion and Equifax), it’s not the same as a FICO score, which is what lenders use when they pull your credit report. As you will see, some estimates are better than others.
Why is the information on my credit report different?
The information on your report might be different because: These differences can lead to variations in your credit score, depending on the bureau. Your credit score is determined by taking your credit history and putting it into a model that calculates your score. There are multiple credit scoring models. Most take into account factors like: