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Different Credit Scores Lenders Use to Evaluate Creditworthiness

Credit Scores: Why What You See Isn't Always What Lenders Get

Last Updated: February 25, 2016

Considering how overwhelming all the information can be on your credit reports – not to mention subject to interpretation – there’s something nice and neat about a credit score. Even if it’s not good, at least it’s straightforward. That is until you consider there are numerous credit scores, and you never know if you and a potential lender are looking at the same one.

Why Do Lenders See Different Credit Scores?

Up until recently, the FICO credit score you were able to purchase through the three major credit bureaus only included your “base” score. However, many lenders use industry-specific FICO credit scores – based on a special algorithm – specific to their industry.

For instance, auto lenders rely on an algorithm that weights previous auto loan history more heavily than credit card companies, for example, which care more about past credit card account history.

Thankfully, as of 2015, the purchase of your base credit scores through Experian, TransUnion, and Equifax will now give you access to 18 of your industry-specific credit scores as well. These 18 scores are the ones used to make the vast majority of lending decisions.

Of course, with so many credit scores, you have no way of knowing which one a lender is going to access to determine your creditworthiness.

Plus, lenders are not required to update their credit scoring software, in which case the scores they’re relying on are based on an outdated algorithm.

How Many Credit Scores Are There?

There are more than 50 FICO credit scores, which are used to make 90 percent of lending decisions. However, there are other credit reporting companies in the game, such as VantageScore, created in a joint effort among the three major credit bureaus as means of competing with FICO.

Which Credit Scores Do I Need to Track?

Since the FICO score is used to make 90 percent of lending decisions that is by far the most important one for you to know.

If you want to be as comprehensive as possible, you can purchase your FICO credit scores from all three major credit bureaus. You will not only have access to your base score, but also the 18 industry-specific credit scores now available to consumers, including those most commonly used in mortgage, auto, and bankcard lending.

Tracking your scores from all three bureaus is a good idea if you are planning to apply for an important line of credit in the coming months.

However, if you’re in the process of repairing your credit, or just interested in keeping an eye on it, tracking just one credit score should be a fine barometer.

Note, that’s not to say you should limit the tracking of your credit reports. You are entitled to a free report from each of the major credit bureaus every 12 months from AnnualCreditReport.com. No matter what your intentions with your credit, by all means take a look at these reports every year, as this is the number one way consumers discover they are victims of identity theft.

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Where to Access Your Credit Scores

You can purchase your credit scores for Experian, TransUnion, and Equifax through myFICO.com.

However, you can also track your credit scores (and reports) for free through monthly credit monitoring sites like Credit Karma, Credit Sesame, and Quizzle. Just keep in mind you will be required to provide these sites with the information necessary to access your credit reports and scores. Plus, the scores you see will only be your base FICO scores (i.e., minus any industry-specific credit scores). But if you’re on a budget and just need to keep a general eye on the upward or downward movement of your credit in general, it’s a good way to go.

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