Did You Know You Have More Than One Credit Score?

July 12, 2024 By: Stephanie H. - CreditMonarch Online Writer0 comments

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Your credit report and credit score will likely be reviewed by the creditor during the application process, regardless of whether it’s for a mortgage, personal loan, or credit card. Having a higher credit score can make it easier to get approved and result in a lower interest rate, which is a win-win situation. However, you don’t have a single credit score. Different credit scores can be selected by lenders to assist them in analyzing applications.

Your credit score is a three-digit number, typically between 300 and 850, that helps determine how likely it is for you to repay debt on time. The greater the number, the better. The decision to offer credit cards, mortgages, autos, personal loans, and other credit products is made by lenders and creditors based on your credit score. In addition, they utilize it to identify significant loan terms, such as the interest rate and credit limit. In order to calculate your credit score, major credit reporting agencies and lenders use information from your credit reports to feed it into a mathematical formula or scoring model. Some of the factors they evaluate include: total unpaid debt, repayment history, number, type and age of any loan accounts, how much of your available credit you are utilizing, new credit applications and past debt collections, foreclosures, bankruptcies.

So how many credit scores are there? FICO and VantageScore are the two main companies that create credit scores for lenders. FICO is a credit scoring company that was one of the first, and it has numerous FICO Scores. As an example, FICO generates standard FICO scores that can be utilized by any type of lender. It also has industry-specific FICO Scores for auto lenders and card issuers—these scores range from 250 to 900. FICO develops a model that is slightly different for each major credit bureau’s database to work with both base and industry-specific scores. This implies that there are three distinct versions of the ‘FICO Score 8’ model (one for Equifax, Experian, and TransUnion). Periodically, FICO releases new versions of its base and industry-specific scores. FICO 10 is the most up-to-date model.

There are slight differences between the VantageScore credit scoring models. Although your score depends on data from one of your credit reports, an identical “tri-bureau” model can score reports from all three credit bureaus. At the moment, there are four different versions of the VantageScore credit score: VantageScore 1.0 through 4.0. Large financial institutions can also create their own customized credit scores. The custom score has the option to incorporate a FICO Score or VantageScore credit scores. They may also include information that isn’t found on your credit report, such as your history with the company.

Here at CreditMonarch, you can review a copy of your most accurate credit report and credit score. To view your credit report and credit score, see below.

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