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Five Important Questions to Know Following a Credit Score

Everyone has some source to track a credit score. It could be online, a bank or credit union or a credit card company. With over 70 different credit scores marketed to consumers, answering these five questions will help you if your credit score is worth tracking.

For more information, you can also go to the podcast available on Spotify and also Youtube, The Drive to 850, Podcast 5: Why are Credit Scores so Different

https://spotifyanchor-web.app.link/e/eN2qivmPkxb

Few credit scores have value while the vast majority of them have little to now value to any consumer. Why? Because no lender, insurer, or other financial service provider utilizes that particular credit score. They are often referred to as “Consumer Credit Scores.” The ones lenders use are called, “Lender’s Credit Scores.”

How can you define the difference?  That is the challenge for everyone. There are five questions to answer if you are tracking the correct information.

First, What credit agency or credit bureau is proving the data to your credit score?

Is it Experian, or is it Equifax, or is it TransUnion? Know which credit bureau’s information is being used to generate that credit score.

Second, which credit score company is generating that score?

There are five of them. FICO is the most know and recognizable credit score programmer. FICO is an independent company that created the first credit scores in 1995. There is also VantageScore. VantageScore is a consortium of the three major credit agencies: Experian, Equifax, and TransUnion. Experian, Equifax, and TransUnion have also created a credit score program that has been marketed to consumers.

Third, which credit score model is it that you are following? The following is a list of the credit scores that are offered to consumers with the number of credit scores offered from Experian, Equifax and TransUnion data:

  1. Classic FICO Scores (3)
  2. NextGen FICO Scores (3)
  3. FICO 8 (3)
  4. FICO 8 Bancard Scores (3)
  5. FICO 8 AutoScores (Multiple)
  6. FICO 9 (3)
  7. FICO 9 Bankcard Scores (3)
  8. FICO 9 AutoScores (3)
  9. FICO 10 (3)
  10. FICO 10 Bankcard Scores (3)
  11. FICO 10 AutoScores (3)
  12. VantageScore 1.0 (3)
  13. VantageScore 2.0 (3)
  14. VantageScore 3.0 (3)
  15. VantageScore 4.0 (3)
  16. Experian Plus Scores (3)
  17. Equifax Credit Scores
  18. TransUnion TransRisk Credit Scores (3)

You dizzy now?  Which one are you following? Do you know? Are they all the same?  No! Do you need to follow all of them?

Fourth, what is the range of the different credit scores. Some go to 850, others go to 900, and some even go to 990. Why does that matter? One score at 720 with a top score of 850 can mean something different than one that goes to 900. It changes the perspective of what excellent is.

Fifth, what lenders utilize which credit scores?

Companies try to hide this form consumers because if you knew that a particular score was not used by any lender, who would follow it? Experian says to get your FICO Scores at Experian.com. Great! But here are over 50 different FICO Scores and most are not used by lenders.  But Experian does not want you to know that. They are notorious for giving you a consumer FICO Score, and not a lender’s FICO Score.

The following is a list of credit scores used by lenders and the top range of each credit score model.

Mortgage                    Classic FICO Scores (850)                    From Experian, Equifax & TransUnion data

 

Auto Loans                  Classic FICO Scores (850)                    From Experian, Equifax & TransUnion Data

    FICO 8 AutoScores (900)

    FICO 9 AutoScores (900)

Credit Cards               Classic FICO Scores (850)                    From Experian, Equifax & TransUnion data

                                   FICO 8 Bankcard (900)

                                   FICO 9 Bankcard (900)

FICO 9 (850) is also utilized by some smaller banks and credit unions for their personal and other types of consumer loans.

By knowing this information, you can better understand which credit scores your lenders are looking at when you apply for a loan. It is always better to know so you can protect your financial interests.

For more information, you can also go to the podcast available on Spotify and also Youtube, The Drive to 850, Podcast 5: Why are Credit Scores so Different

https://spotifyanchor-web.app.link/e/eN2qivmPkxb

 

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