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If you’ve ever applied for a loan, apartment rental or even a job, you might have seen the 3-digit number that is your credit score. And if that number changes from day to day, or application to application, chances are you’re wondering why. What many people don’t realize, however, is that there are multiple credit scores. So, if you’re wondering which credit bureau, report or score is the most accurate, here’s what you need to know. Table of Contents
What is the Most Accurate Credit Score?Approximately 90% of all U.S. lenders use the latest version of the FICO credit score. Even if they use a similar scoring model, credit scores from other companies can vary by up to 100 points from this score. So, it’s a good idea to monitor your FICO score since that’s the one most lenders will check. The other most accurate scoring model is the VantageScore 3.0. Keep an eye on this score as well if you’re looking into loans or other financial products. The basic FICO credit score range is 300 to 850.
What is a FICO Score?Founded in 1956 in San Jose, California, FICO was originally known as the Fair Isaac Corporation. It started as a data analytics and software optimization company but became known for its first general-purpose FICO score in 1989. However, it wasn’t until 1995 that the FICO score became mainstream. That was the year the Federal Home Loan Mortgage Corporation, or Freddie Mac started using the FICO score in all new mortgage applications. From then on, more lenders began using this scoring model to evaluate consumer data and calculate their credit risk. The FICO credit scoring model uses the following factors to determine an individual’s score:
You can find your FICO score at myFICO.com or one of the major credit bureau’s official websites. Another option is to get it from your credit card issuer, bank or credit union. Industry-Specific FICO ScoresFICO scores 8 and 9 are general scores. However, there are several industry-specific FICO scores in use today. Each score is used for specific financial products, like car loans. For example:
6 Reasons Why Your Credit Score Might DifferIf your credit score isn’t quite adding up across different sources, here’s why:
Regardless of the scoring model or report, you should check your credit score regularly. That way even if the numbers don’t perfectly match up, you’ll still have a good idea of what lenders and prospective employers are seeing. There’s Far More Than Just One Credit ScoreThere are dozens of different credit scores used today. Not only are there three major credit bureaus (TransUnion, Experian and Equifax), but each one has a database of consumer information and a scoring system. In the United States, every consumer has at least 60 different credit scores, though most never use nearly that many. One of the most common scoring systems, FICO, has several credit scores of its own, including:
The VantageScore, introduced by the credit bureaus in 2006, is another popular credit score. Along with this, certain lenders rely on other credit scores for additional insight into people’s financial habits and creditworthiness. Non-VantageScore and non-FICO scores include:
A person’s credit score plays a major role in many facets of society. It can determine whether a lender or creditor will lend to them. Plus, it can help a prospective landlord decide whether to lease to them and what deposit to demand. It can even come into play in certain employers’ hiring decisions. Some people view certain credit scores as more or less accurate than others. However, this primarily depends on what it’s used for and the information included. Overall, credit scores serve one purpose, and that is to determine a person’s credit risk and track their credit history. Why Are There So Many Different Credit Scores?First, there are three major credit bureaus, each with its database of consumer credit information. Then, there are dozens of scoring models out there, including FICO and VantageScore. Every model relies on a different algorithm to rank a person’s credit. On top of that, some credit scores exist solely for educational reasons. Besides this, some creditors only report consumer activity to one credit bureau rather than to all three. As a result, one bureau might have information that the others don’t. This results in a different credit scores among providers. The different credit scoring companies also sometimes update their scoring system. However, lenders and creditors don’t always follow suit. Instead, they might continue to use an older scoring model, resulting in two or more credit scores. Each score also emphasizes a different aspect of a person’s credit behavior. For example, one scoring company could give more weight to payment history. Another might focus on the mix of credit or the number of open accounts (credit cards and loans). The next company might care more about credit history, late payments, etc. Since every formula is based on the individual’s credit history, the final credit score tends to be accurate. But, since each score is weighted differently, the numbers aren’t always the same. Other Types of Credit ScoresBesides FICO, two other widely known scoring models are the VantageScore and CE score. VantageScoreThe original VantageScore used a scoring range of 501 to 990. However, VantageScore 3.0 and 4.0 both range from 300 to 850. Unlike the FICO score, this system categorizes consumer credit based on the following:
Around 23% of consumers have an excellent VantageScore, while 38% have a good score. This scoring model uses five categories to determine a person’s credit score. However, it doesn’t give exact percentages for each category. The most important factors are:
You can get a free VantageScore report from AnnualCreditReport.com. Most major credit card issuers (CreditWise by Capital One, Credit Karma, Discover’s Credit Scorecard, etc.) also provide a credit report. Or you can request it from the credit bureaus. CE Score and Other Credit ScoresThe CE (community empower) score is a free credit score created by CE Analytics. Quizzle.com once used it before the site converted to VantageScore. It ranges from 350 to 850. Some credit scores are used for educational purposes only. Many of these existed before the FICO system. These scores are less accurate and less comprehensive than the FICO or VantageScore. They are, however, a good resource for those who want to monitor their credit for free. If you’re looking for a comprehensive credit report, go to AnnualCreditReport.com. This site is federally authorized and offers complete credit reports to consumers. Want to know more about how to get the most accurate credit score? Watch this video: Credit Reporting AgenciesHere’s a breakdown of each credit bureau, including how to contact them. ExperianLike Equifax and TransUnion, Experian collects data from a person’s credit history to make an accurate credit report. Experian uses the VantageScore and FICO scoring models like the other credit bureaus. An Experian report includes:
Here’s how to contact Experian directly. Phone: 1 (888) 397-3742 Website: https://www.experian.com/ Mailing address: P.O. Box 2104, Allen, TX 75013-0949 How to get an Experian credit reportYou can get a free Experian credit report and credit monitoring from Experian’s official website. You can also get it from CreditKarma.com, AnnualCreditReport.com or Credit Sesame. EquifaxEquifax uses much of the same data as Experian to compile a credit report. However, Equifax lists all accounts as either “open” or “closed,” which makes it easier to separate old data from current data. An Equifax report also includes:
Here’s the contact information for Equifax. Phone: 1 (888) 548-7878 Website: https://equifax.com/ Mailing address: Equifax Disclosure Department, P.O. Box 740241, Atlanta, GA 30374 How to get an Equifax credit reportYou can obtain an Equifax credit report from Credit Karma, Credit Sesame or AnnualCreditReport.com. Or you can go to the bureau’s official website and get a free, comprehensive copy once a year. TransUnionTransUnion operates based on the same principles and scoring model as the other two major credit bureaus. A TransUnion report also includes the same type of information and is equally accurate. Here’s the contact information for TransUnion. Phone: 1 (800) 916-8800 Website: https://www.transunion.com/ Mailing address: P.O. Box 1000, Chester, PA 19022 How to get a TransUnion credit reportYou can get a free credit report from each credit bureau once a year. You can also request your credit score with updated information from Credit Karma, Credit Sesame or AnnualCreditReport.com. Why Does My Credit Score Matter?Your credit score directly determines your creditworthiness. It acts as a tool that helps you qualify for loans, lower interest rates and credit cards with better benefits. With a good credit score, you can also negotiate for better loan terms than someone with a lower score. You can also apply for loans with a higher limit, which is convenient for making major purchases.r purchases. Besides, a higher credit score typically means an easier approval process for apartment and home rentals. If your score is high enough, you could also get better insurance premiums and pay smaller deposits. The benefits of having a high credit score can stack up over time. People with a lower credit score can still apply for loans, get utilities and apply for credit cards. However, they’ll usually face higher fees than those with better credit since lenders and insurance companies see them as a higher risk. Keep in mind that your credit score will change throughout your life. For instance, applying for a new account through Capital One will result in a hard inquiry with all three of the major credit bureaus, which can affect your score. Most other lenders only run a hard inquiry through one of the three major bureaus, which impacts your score a bit less. How Often Should I Check My Credit Report?The Consumer Financial Protection Bureau (CFPB) recommends checking your credit report annually. If you’ve been a victim of identity theft or noticed an error on your report, consider checking it more frequently. You might also want to check your score before applying for a loan or new job. Will Checking My Credit Information Hurt My Credit Score?Only hard inquiries impact your credit score. Every 12 months, you can get a free credit report from any of the credit bureaus without hurting your score. If you check it another way, make sure it won’t result in a hard inquiry. For more information, check out the CFPB’s page. How Does Credit Repair Impact My Credit Score?Credit repair services review your credit report for any information that shouldn’t be there. They then try to remove that information for you by disputing it with the credit bureaus. This process can take up to a year and generally comes with a service fee ranging from $20 to $150. If successful, it can lead to a boost in credit score. There are many scams out there, so verify any credit repair company before starting the process. Check with the Better Business Bureau or the CFPB for any complaints, negative reviews or licensing errors. Will Credit Monitoring Help My Credit Score?Credit monitoring is a service that observes any changes in a person’s credit score and financial behavior. This service can help catch any errors early and guard against identity theft. If something doesn’t seem right with your activity, the credit monitoring service can temporarily freeze an account until you verify it. This, in turn, prevents any extra damage to your credit or finances. Most credit monitoring services charge a monthly fee of around $30. Look for a legitimate company not offered by the credit bureaus. That way, you’ll have more security in case of a data breach, such as the one experienced by Equifax in 2017. The Bottom LineYour credit score is extremely important when it comes to things like loan or credit card applications, rentals, or employment. It’s also important to monitor your credit reports because incorrect information there can drive down your credit score. Check your reports and score at least once a year, or before making any big financial decisions like taking out a personal loan or mortgage. Although there are many reporting systems out there, the FICO and VantageScore 3.0 are the best ones to monitor. Get a copy of your report from the bureaus, a free online website or a reputable service. FAQsDo Student Loans Affect Your Credit Score? Student loans are installment loans you repay over time. Just like other installment loans, they can affect your credit score. Applying for one results in a hard inquiry, which will cause your score to drop temporarily. However, with on-time payments, you can start building credit with them. What is a Credit Freeze? A credit freeze prevents someone from opening a new credit account in your name. It lasts until you ask the credit bureaus to remove it. While it’s active, you can still apply for jobs or an apartment rental. However, creditors will not be able to see your credit information. How Can I Check my Credit Report Information and Dispute Errors? Go to AnnualCreditReport.com for the most up-to-date credit report. Or call them at 1-877-322-8228. What is the Lowest Credit Score to Buy a House? This depends on the type of loan. Conventional mortgage loans require a 620+ score, while a USDA loan requires 640+. FHA and VA loans require a 580+ score. In general, shoot for a credit score of 640 or above before applying for a mortgage. Which credit report is most accurate?Although Experian is the largest credit bureau in the U.S., TransUnion and Equifax are widely considered to be just as accurate and important. When it comes to credit scores, however, there is a clear winner: FICO® Score is used in 90% of lending decisions.
Where can I get my most accurate credit score?Regularly monitor your credit reports from each of the three main credit bureaus, Experian, Equifax and TransUnion, to make sure there are no errors. You can access your credit report for free through annualcreditreport.com.
What is an accurate way to check your credit score?Here are a few ways:. Check your credit card, financial institution or loan statement. ... . Purchase credit scores directly from one of the three major credit bureaus or other provider, such as FICO.. Use a credit score service or free credit scoring site.. Who gives you an accurate credit score?FICO bases its scoring on the credit reports of millions of consumers at a time, received directly from the three credit bureaus to create the most accurate scoring. VantageScore, on the other hand, uses consumer credit files in smaller sets to create its formula for scoring.
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