Understanding the Differences in Credit Scores

Wed, 06 Nov 2019 19:16:00 GMT

There are many credit score models available to consumers that provide different credit assessments based on the same credit information. How does that happen?

Creates a lot of confusion

Got to CreditKarma.com and you get a 704 TransUnion credit score. Go to Experian.com and the TransUnion score shows a 687. Go to a mortgage lender and that same TransUnion score is a 671.

What gives?

There are two questions you need to answer.

1. What credit score model do lenders use?

2. Where do you find those credit scores?

FICO Classic Credit Scores

The FICO Credit Scores are used by most lenders. Here is a breakdown by the types of lenders:

Type of Lender Percentage that Use Classic FICO Scores Score Maximum

Mortgage Lenders 100% 850

Home Equity / 2^nd Mortgage Lenders 100% 850

Auto Lenders 70%* 850

Credit Card Companies 67%* 850

Type of Lender Percentage that Use FICO 8 Auto Score model

Auto Lenders 30% 900

Type of Lender Percentage that Use FICO 8 Bankcard Score model

Credit Card Companies 33% 900

* Estimate given by credit bureau companies who provide credit reports and credit scores to lenders.

Tracking Your Lender’s FICO Classic Credit Scores

Where do you find the FICO Classic credit scores? There are only three places.

Lender
MyFICO.com
My Credit Plan or any 501 (c) (3) non-profit credit counselor.

All other scores provided to you are inaccurate and too often provide misleading information. For this reason, it is best to follow your Classic FICO Scores through MY Credit Plan.

My Credit Plan Blog

Understanding the Differences in Credit Scores