Many people talk about credit scores as though you only have one, but the truth is a little more complicated. In reality, you can have hundreds of scores. Here’s why.
1. Multiple credit reports means multiple credit scores.
Your credit scores are calculated using information from your credit reports, which you can get from the three major credit bureaus — Equifax, Experian and TransUnion.
Because each bureau may have different information about you, your scores from each bureau can differ. These discrepancies exist because some lenders don’t report to all three bureaus, and the bureaus may not update your reports at the same time.
2. There are two main credit scoring models used to calculate credit scores.
The bureaus use credit scoring models to turn your credit report into a three-digit score that indicates your creditworthiness.
Currently, the three major credit bureaus use two main models: FICO and VantageScore. This means that you can have both VantageScore scores and FICO scores from each bureau, and lenders can choose which model they’d like to use. Currently, most lenders — around 90% — use FICO scores, while roughly 10% use VantageScore.
And these models are just the most popular ones in use. There are other models out there that lenders use, including ones they’ve created themselves.
3. Each scoring model can have multiple variations.
There are a couple of main reasons both the VantageScore and FICO models have many variations.
- The models have been updated over the years. Both FICO and VantageScore have released updated versions of their models over time. FICO, for example, has released ten versions of its basic scoring model while VantageScore has four. The older versions of these models are still used by many lenders.
- Each model has versions tailored to specific purposes. In addition to providing generic scoring models, both VantageScore and FICO provide specialized models that assess the risk of providing mortgages, auto loans, bank cards and installment loans.
These variations in scoring models mean that, for example, if you were to apply to for a mortgage with two different lenders, each lender might receive a different score when deciding if it should approve you.
And both of those scores may, in turn, be different from the scores used to determine if you qualify for an auto loan or credit card.
4. Lenders often calculate their own scores.
FICO and VantageScore also provide their scoring models to lenders, who frequently tweak the algorithms to serve their own needs. So, in addition to the dozens of scores calculated by credit bureaus, many lenders have their own individual scoring methods.
Do I need to follow all my scores?
While you may feel like you need to follow all your scores to keep your finances in check, keeping tabs on all of them may not be possible, since most — including the tailored models — are only provided to lenders.
Instead, try following at least one or two of the scores made available to consumers, and take note of any large changes you see. Because your scores are derived from mostly the same information, a change in one score often indicates a change in the others.
You can have dozens of credit scores — or more. But don’t let that fact worry you too much. It would be impractical to track every single score you have, so consider following at least one or two instead.