You’ve likely heard that your credit score is important. It can impact your ability to get a credit card, buy a car or a home, or even rent an apartment. But most talk of credit scores makes it seem as if you have only one.
In fact, you may have dozens of credit scores out there.
But don’t let that thought overwhelm you. Keep reading for a deeper look at the different types of credit scores and when they matter to you.
So why isn’t there a “one-size-fits-all” standard for credit scores?
Well, some credit scores are specific to different credit rating bureaus, and each credit bureau uses different credit scoring models.
Plus, some credit scoring models are specific to certain types of loans.
Let’s start with the three credit rating agencies: Experian, TransUnion, and Equifax.
Each of these credit bureaus receives different information from your creditors.
For example, your history with one credit card issuer might be reported to Experian and TransUnion, but not Equifax. Your private student loan might be reported to Equifax, but not the other agencies. So your credit scores may be different across each agency.
That’s why, when you check your credit score using Credit Karma or another service, you might see two or more different credit scores.
Ideally, there won’t be a major difference between the different scores. If there is, you may need to review your credit reports from each of the three credit bureaus to find out why.
Digging a little deeper, each credit rating bureau uses one of two credit scoring models: the FICO Score and VantageScore.
Here’s a brief overview of each.
Fair Isaac Corporation (FICO) score
A FICO score is a three-digit number based on information contained in your credit report. Learn how to read a credit report.
According to the Fair Isaac Corporation, over 90% of lenders use FICO scores in their lending decisions.
FICO scores range from 300 to 850, based on the following scale:
|FICO Credit Score Range
|Poor credit scores are well below the average score of U.S. consumers. It may be difficult to get approved for a loan with a score in this range, as it signals to lenders that you are a risky borrower.
|580 – 669
|Fair credit scores are below the average score of U.S. consumers. Some lenders will approve loans for borrowers with a Fair credit rating, and some will not.
|670 – 739
|Good credit scores are near or slightly above the average for U.S. consumers. Most lenders are willing to extend credit to borrowers with a Good credit score rating.
|740 – 799
|Very good credit scores are above the average for U.S. consumers. Having a Very Good rating shows lenders that you are a responsible borrower.
|A credit score above 800 is well above the average score for U.S. consumers. Borrowers with an Exceptional credit rating have access to the best interest rates and terms.
Your FICO credit score is calculated using data from your credit report, grouped into five categories:
The VantageScore model was developed by Experian, Equifax, and TransUnion because they recognized a need for a more consistent scoring model that was easy to understand and apply.
It’s supposed to be more inclusive for borrowers who are new to the credit market or use credit infrequently.
The current version of this credit scoring system is VantageScore 3.0, which ranges from 300 to 850 based upon the following scale:
|300 – 499
|Borrowers with a Very Poor score will likely not be approved for credit.
|500 – 600
|Borrowers with a Poor VantageScore may be approved for some credit, but their rates, required down payments, and other terms may be unfavorable.
|601 – 660
|Borrowers with a Fair score may be approved for credit, but their interest rate won’t be as competitive as those offered to borrowers with Good or Excellent credit.
|661 – 780
|Borrowers with a Good VantageScore are likely to be approved for credit at competitive interest rates.
|781 – 850
|Borrowers with Excellent credit are most likely to receive the best interest rates and most favorable terms.
Your VantageScore is calculated using information from your credit report, grouped into six categories. However, some score factors carry more weight than others.
To make understanding different types of credit scores even more confusing, you can have different types of FICO scores.
Most often, these alternate versions of your FICO score are used for specific types of lending.
FICO Auto Score
Your FICO Auto Score might be used by car lenders. It’s based on a generic FICO score, then altered to better predict the likelihood that you’ll repay an auto loan on time.
Your history with auto loans could be especially important when calculating your FICO Auto Score.
For example, if you pay your credit card on time but have trouble making your car payment, your FICO Auto Score might be lower than your regular FICO score.
FICO Bankcard Score
Your FICO Bankcard Score might be used by credit card lenders. Like the FICO Auto Score, it starts with your generic FICO score but gives more weight to your handling of credit cards than other types of debt.
For example, if you always pay your mortgage on time, but tend to max out your credit cards, your FICO Bankcard score might be lower than your regular FICO score.
Also, both FICO and VantageScore periodically update their scoring models.
For example, FICO Score 9 launched in 2014. The newest version treats unpaid medical collection accounts differently than other collection accounts.
However, it took a while for lenders to start using it.
FICO Score 10 will be available to lenders by the end of 2020. It treats late payments and debt more severely.
It also shows trend data for the last 24 months – for example, whether your credit card balances have been increasing or decreasing over that timeframe. It’s up to lenders to decide if and when they’ll convert to the new FICO Score 10 model.
Likewise, VantageScore 4.0 began rolling out in the Fall of 2017. It ignores unpaid medical collections in a consumer’s credit report, giving insurance companies more time to make payments.
Also, tax liens and judgments are less important to your credit score than they were under VantageScore 3.0.
It’s up to each lender to determine which credit score they use and what other financial information they consider in their credit decision process.
So if you’re planning on applying for a car loan, mortgage, or another type of credit, it’s a good idea to check both your FICO and VantageScore credit scores. This can help give you an idea of what your lenders will see, even if it’s not the exact number they’ll use to make their decision.
Fortunately, there are several ways to check your credit scores.
You can order free copies of your credit reports from each of the three credit bureaus once every 12 months at AnnualCreditReport.com, but your credit reports don’t contain your credit score.
So how can you get your credit scores? Here are a few ways.
Many credit card companies, banks, and lenders have started providing free credit scores for their customers. It may be printed on your statement, or you can view it by logging into your credit account online.
Typically, the bank or financial institution will tell you which credit scoring model they use. For example, Citi and Discover provide FICO scores, while Chase, CapitalOne, and Self Financial provide VantageScores.
Just keep in mind, these companies may provide your credit score for free, but they’re doing it in exchange for your information – and the ability to sell you products and services that are tailored to your financial situation.
You can purchase your scores directly from the credit reporting source, but this route can be expensive.
To purchase your TransUnion credit score, you need to sign up for credit monitoring, which costs $24.95 per month, plus tax. The TransUnion score you’ll receive is based on the VantageScore 3.0 model.
Accessing your Experian credit score is free, but you will need to create an account and answer a few questions to verify your identity. Experian provides a score based on the FICO Score 8 model.
To purchase your Equifax credit score, you need to sign up for a credit monitoring service. These credit reporting services run anywhere from $14.95 per month to $19.95 per month. Equifax provides a score based on the FICO Score 5 model.
To order your credit scores directly from FICO, you have a few options:
Remember, whichever credit score you're looking at, it reflects the information on your credit report. If you check your credit score and don't like what you see in your credit account, check your credit reports for errors or work on building your credit.
Janet Berry-Johnson is a Certified Public Accountant and freelance writer with a background in accounting and insurance. Her writing has appeared in Forbes, Freshbooks, The Penny Hoarder, and several other major outlets. See Janet on Linkedin and Twitter.