Understanding Credit Score Differences

Understanding Credit Score Differences

There are few numbers in life that matter as much to your financial outlook and well-being as your credit score. However, confusion is the norm for consumers when it comes to this important financial gauge.

The History of Credit Scores

Prior to the creation of standardized credit scores, lenders and loan officers would often develop their own "score card" to assess the risk of lending to a particular borrower. This score card could vary drastically from one lender to the next. The major issue with this original method was that it was based on a loan officer's ability to judge risk, rather than a common set of rules and specific calculations.

So, in the 1980's, the Fair Isaac Corporation set up the first general purpose credit scoring system based on credit bureau information in order to help remove the inherent inconsistencies that arose from having each lender perform their own credit diagnostics. It has since become known as the FICO score and the algorithm has been widely adopted by America's largest credit reporting agencies.

Why would my score differ between credit agencies?

The three major credit bureaus are Equifax, Experian and TransUnion. Simply put, the reason that the scores you receive may differ is that each score is dependent on the credit report that each receives and the scoring model they use.

In other words, Equifax might have not exactly the same information on you as Experian and vice versa. One credit bureau may be missing an account that either helps or hinders your score and will therefore report a different credit score than another credit bureau. If the system was perfect, this wouldn't happen. But since it isn't, you want to make sure that they all have the proper information by checking your free TransUnion credit report on Credit Karma and the others on www.AnnualCreditReport.com.

Why would my score differ between the same credit agency?

Credit bureaus use many different scoring models, even within the same credit bureau. Each bureau can use dozens of different credit score models based on the requirements of different lenders.

Each credit score model has a slightly different formula that takes into account some of the over 200 different factors of your credit report; like a thumbprint, no credit score model is exactly the same. In addition, credit scores can change anytime so you have to make sure you are comparing credit scores from the same day.

As an example, a mortgage company will get a different score than a company providing auto loans, since they are looking for different types of credit history and credit factors.

Other Available Scores

While FICO is the most famous, there are several other versions and providers of credit scores, such as VantageScore, NextGen, BEACON and EMPIRICA. Some scores are directly developed by credit bureaus, while others are developed by outside companies.

Is there a "best score"?

In a word, no. In order to protect revenues, credit reporting agencies will often position their scores as the best or the most predictive. In reality, all scores must adhere to similar guidelines to be truly predictive, regardless of the final output number. All credit scores are built from the same base set of data and statistical procedures.

Like many products and services in the marketplace, there are a plethora of different options for you (and the businesses that serve you) to choose from, simply because every buyer is different. Based on cost and effectiveness in each buying situation, there are credit scores for sale to satisfy each customer.

Score Ranges

Just as a point of reference, it may be important for you to know what the score ranges are for each of the major scoring systems. The higher your score the better, as it is a general gauge of your overall creditworthiness in the eyes of lenders.

  • FICO Score: 300 -850
  • Score from Experian: 330-830
  • Score from Equifax: 300-850
  • Score from TransUnion: 300-850
  • VantageScore 3.0: 300-850

Bottom Line

Because there are hundreds of credit scores that measure many different probabilities, consumers generally do not need to be overly concerned with the type of score or even their number. It's also important to note that your credit score is a variable which can change every time your credit report changes. For these reasons, monitoring changes within a single score over time can be a better way to gauge your overall credit health.

These complicated facets of credit scores are exactly why we developed Credit Karma. By keeping the bureau and credit scoring model consistent, we are hoping to provide consumers with a single, easier-to-follow point of reference on their credit health. Best of all, it's always free to check your credit score with us. In this way, you can access your score as often as you want and always have a consistent baseline to better understand how your score is changing.

Disclaimer: All information posted to this site was accurate at the time of its initial publication. Efforts have been made to keep the content up to date and accurate. However, Credit Karma does not make any guarantees about the accuracy or completeness of the information provided. For complete details of any products mentioned, visit bank or issuer website.

All Comments

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1 Contribution
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I have a score of 788. Should I bother to try and improve it or just leave it alone? There are some accounts that I could close that are not the oldest like store cards.

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Reply by
frugal1

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The best credit card offers and the lowest interest rates are given to those people with FICO scores above 750.  If that is correct, having a higher score only strokes the ego; it does not result in any tangible benefit.  However, please keep in mind that the scores provided by CreditKarma, while extremely useful, are not directly related to the FICO score.

Reply by
erickweku

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Your credit score is pretty excellent. I will advise not to close any cards but maintain a zero balance on them because closing them can taking more than 20 points off your score. your credit can go higher only if you have your auto loan paid off, no recurring balances on credit card and more than 80% off your home loan or mortgage paid off. Keep on with the good works

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Reply by
dustinkirk

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It is a soft inquiry and does not count against you.

Reply by
g81630

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I recently paid and closed my Toyota account for reason: truck was paid in full and my credit score was penalized-down 48 points...I've never face this kind of dilemna before..Does anyone know why? Thank you all...

Reply by
1doggone1

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leave it alone. people would kill for that score.

Reply by
pixcasey

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Do the Simulation of any combination on the credit simulator page. Do a mock run on closing old accounts. I believe the Vantage scoring system is different to the older 

  • FICO: traditionally between 300 and 850
  • Experian: 330 - 830
  • Equifax: 300 - 850
  • TransUnion: 300 - 850
  • scores so, play around with it. I've found it very difficult to increase my grade when it gets into the higher levels.

Good Job on maintaining good credit! : )

Reply by
DiveDiva01

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1.  I think you'll find the inquiries are 'soft' inquiries.  No-one can place a hard inquiry on your credit unless you've given them signed, written permission to pull a credit report, as when you sign an application for a credit card or a loan. 

2.  I played the 0% balance transfer game many years ago.  Later, Chase came in and bought up the card issuing banks and I ended up with numerous Chase credit card accounts.  They allowed me to roll the credit limits from all those cards in to one.

Reply by
strunker

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no it doesnt count as a hard inquiry ur retarded

Reply by
Orlandomike

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If things are running well for you dont bother!

Reply by
SURFER8210

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WRONG.....!!!

Having Credit Karma check you score results in a SOFT inquiry...!!

If you don't know what you're talking about sometimes it's better to say nothing...!!!

Reply by
lerainking1001

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It is a soft inquiry and shouldn't effect your credit.

Reply by
kfuchs87

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Credit karma does not do a hard inquiry on your account... Read their FAQ...

But as for Chase your right. I had 2 citi cards that I was able to combine with no problem. Chase on the other hand told me no... Why I have no idea...

Reply by
blugene501

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 "did you all knnow that every time that "Credit karma" checks your credit score, it counts againist you by theem placing a "hard Inquiry on yiur credit ?"

This is not true. Do a little research!

Reply by
capriceclassic

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True it does not affect your score at all I check mine all the time.

Reply by
conantgould

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requests by yourself to view your credit do not show up when others look at your credit

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Reply by
dustinkirk

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There is never a reason to carry a balance. It is just as useful to pay in full.

Reply by
bear768

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never close an account it causes you to lose points alway keep all credit loans below 50% kepp all credit active even if it mea buying every month and paying it off you history on how you pay everthing on time is how credit it measured it like playing always be on top 

Reply by
billinorlando

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I have heard that if you close any of your credit cards. It could bring your score down. And you should use them at least twice a year to keep them active. Canceled or inactive cards will lower you score, Bill

Reply by
timmer

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leave it never close anything ruins your credit

Reply by
Brooklynbad

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Your score will increase as the accounts age. You don't have to close any accounts. just continue to make on time payments. keep balances low and don't seeek any new credit.

Reply by
cecefun2

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Mine is worst than yours.

Reply by
cassilynae

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That almost or is the best score a person can get. and do not ever close a credit account as it will negatively affect your credit.  Just cut up the card and forget about until the next one is sent to you, then activate it then destroy it agan...  and if oyu havent got a credit card yet,  you would want to buy somethiing at around 300-500 dollars then pay it off with payment in six months not earlier.  Than do it agan and you will have triple AAA credt score with anyone and can qualify for the great auto leasing programs, and could also if you have the income get a decent pertile home loan.

I hope this has helped...

Cassi

Reply by
BlairJames

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thats GREAT credit wish i was up there congrats and god bless!!!

Reply by
DConnectionsTEK

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Don't Close any accounts even if paid in full.  It will lower the avarage age of your total credit and thus cause a drop in your credit score.

Reply by
joshanderson24

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In order to prove your score DO NOT CLOSE REVOLVING ACCOUNTS! As far as store cards(installment cards) are not good for your credit they are actually bad for your credit. As far as revolving accounts pay them up to 75% or so and do not use them and make timely payments that will booost your score. DO NOT OPEN ANY NEW ACCOUNTS while trying to improve your score. Nowadays a 788 score is not that good, yes its good but its not real good. I would improve my score if i was you, close that store card(its not any good) and pay down your revolving accnts to 75% or so and do not touch them wait approx a month to 3 months to check your score( it depends when the buisness reports to the agency some report monthly others report every 3 months). Hope this helps

Reply by
DLFG

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Actually they say that closing the accounts you don't use negatively effects your credit scores because it lowers your "available" credit and the score is based on the percent used out of the total available. the more credit you have and the less you use the higher your score! So don't close them just let them ride and cut up the cards so they don't get stolen or used accidently. 

Reply by
ArthurJ2012

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Keep improving your credit score!

Reply by
donnaldale

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DOn't ever close an acoount.   10% of your score is a healthu mix of credit.  Go but one lunch a month if it is a credit card and pay it and pay it on time.  your score consists of 35% payment history  30% outstanding debt 15% length of credit history 10% recent inquiries 10% healthy mix types of credit

Reply by
just4me36

3 Contributions
0 People Helped

No leave them alone. I did that and it hurt my credit. Just use them once in a while for a very small ammount and pay it off. that will help it go up..Thats what I am doing now. The higher the score the better,

Reply by
1JVCE3C5

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Credit Karma does a "soft pull" which does not count against your score.  It's in their documentation.

Reply by
dockside58

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0 People Helped

Don't close any accounts. It hurts your score!

Reply by
jenholloway

1 Contribution
0 People Helped

Self-pulled inquiries do not count against you, only inquiries by potential credit grantors do.  

Reply by
OneFastCourier

1 Contribution
0 People Helped

I update my CK everyday. I have never seen any inquiries on my report such as you speak.

Reply by
amadues

4 Contributions
1 Person Helped

I pulled my 3 days ago.  Credit Karma "does not" place HARD InQuiry!!!!!!!

Reply by
BEEFYKID

2 Contributions
0 People Helped

HA HA HA FUNNY

Reply by
royol31

1 Contribution
0 People Helped

I update my Creditkarma score often, but I never see any indication of an inquiry.  I have noticed that while my 3 bureau scores are continuing to rise, my vantage score is declining.  Could it be because of the updating?  Also, there is no information offered on the vantage score, such as inquiries listed, etc.  Any insight on the worth of the vantage score?

Reply by
danvain

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0 People Helped

Completely bogus.  Couldn't be more wrong.

Reply by
tleonar2

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0 People Helped

Credit Karma is a soft inquiry, it won't show on your credit report

Reply by
Cheerfulone55

2 Contributions
0 People Helped

My FICO score while still low 673 is higher than EQ 667; EXP 638 and TransU 653.  What gives with tha?.  I know that I will improve once I refi, but until then it is what it is.  This has been a struggle sine my divorce, but am proud to say has improve...though many of you wonSubmit Your Comment't think so.

Reply by
roberto1970

1 Contribution
0 People Helped

yes it would be nice to improve it to 789 that way you could buy what you want and pay no interest rate

Reply by
airbiscuit

3 Contributions
0 People Helped

simply, not so--

Reply by
jfizzdizzle

1 Contribution
0 People Helped

The more available credit the better. Dont close any.

Reply by
wens2222

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0 People Helped

is this true? i thought it was a soft hit and did not count against you

Reply by
KMberry93

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0 People Helped

Be aware that any open account that you have once closed reflects negatively on your credit report.

Reply by
josephine57

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0 People Helped

leave it alone

Reply by
jeannemp24

1 Contribution
0 People Helped

always good to try and improve your credit score. 

Reply by
mommateetee

2 Contributions
0 People Helped

That's a nice score! Now protect it! You can always shoot for the 800 range for even better rates etc.

Do not close old accts. You will work against your best efforts if you do so.

Reply by
just4me36

3 Contributions
0 People Helped

Do not close any accounts. when u do it hurts your credit score. It will drive it down....

Reply by
ok2483

1 Contribution
0 People Helped

leave it alone!!!!!

Reply by
PaulRambish

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0 People Helped

Never close out your old accounts. That's why your score is so good b/c you don't owe anything on your old cards but still have very long history with your cards. That's the Key. Long history of something and not be late.

Reply by
Valblalock

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0 People Helped

Leave it alone.  If you close accounts that are in good standing, it could lower your score.

Reply by
bert61

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I have been told the better you score is the better  chance you have getting a low interest rate loan

2 Contributions
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Helpful to 3 out of 4 people

IF You are using credit for anything you need to LEARN ........the cost.....PAY CASH, If you can't afford it DON'T BUY IT
GM

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I can appreciate this is a free service, and I'll be the first to say I have used this service faithfully for the last 3 years or so.  I think its great we can access it without fear of gimmicky membership trials offered by the 3 bureaus.  

I would be remiss if I didn't express my disappointment in the shift to Vantage scores.  I can also get my free scores using a combination of different credit card accounts that I have, and they all offer my free FICO score.  What used to be great about Credit Karma was that I could view by Transunion FICO score for free. Now I can see my TU and Equifax score for free, but because its a Vantage score, I only visit this site to see if something changes, but not for any other information.  What used to be an every day almanac of my credit information has become a weather vane I glance at every once in a while.  Basically I use it as a queue to go check other sites to find out what my FICO score is.

Thanks to the builders of this site for providing a free service like this, but please consider switching back to FICO.  Its a more meaningful score to consumers.  No one I talk to uses my Vantage score when I apply for credit.  Thanks for listening.

Credit Karma Team
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Hi sburns7650,

Thank you for your feedback.

Credit Karma has never provided a FICO score. We previously provided the TransUnion New Account score. 

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I would urge all folks (particularly fellow senior citizens) who have no debt, no late payments, and MINIMAL credit card usage (something that Trans Union seriously downgrades you for) to take a long hard look at what that does to your AUTO INSURANCE RATES!!  In our case, we flipped the policy over into my spouse's name and instantly saved $235 per year.  Then, when you learn that you, too, are getting shafted, start raising hell!  Let's see if we can de-throne Trans Union!

1 Contribution
3 People Helped

Helpful to 3 out of 5 people

You don't need to worry about your credit if you live with in your means. Live as debt free as possible and stop giving your hard earned money to creditors. Work hard and save for the things you want in life. Don't be in a hurry, life is short enough as it is. 

8 Contributions
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Helpful to 4 out of 4 people

I am in the same situation. My Transunion score went from 600 to 720 and at the same time Vantage dropped from 620 to590. also I had a crack in my windshiel from a stone bei g kicked up and my auto insurance score dropped 20 points even ** in 48 years of drivi g never a ticked or accide nt. this is all bs.

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71 Contributions
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Helpful to 4 out of 4 people

It happened to me, as well.  On the very same day that CreditKarma showed my mortgage to be paid off in full, my Vantage score dropped 47 points!  It came as a total shock to me, because I wrongly assumed paying off that major debt would somehow improve my score, not worsen it.  Go figure :)

1 Contribution
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Would like to know what the numbers mean the higher the number the better the credit is,never got mine checked so I'm a newbe lol?

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Need advice...My credit score is in the 570's. My score dropped 32 pts since June. I was late in the past on credit cards.  I dont use credit cards at all now.  I only owe on my house.  No car payments, credit cards, etc.  How can I get my credit score up?  I can't get approved for anything.  Thank you!

Reply by
stillwaiting2c

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From my experience, having NO credit is as bad as having bad credit.  Open a revolving charge with someone (I used Fingerhut and Amazon) and buy something that you make payments on (appliances, furniture) and then be sure to make the required payments on time for at least 6 months.  Only charge small amounts that can be paid off in 6 months or less.  You need to establish some kind of record that shows you can make payments on an account on a regular and timely basis in order to show you are a good credit risk.

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Helpful to 8 out of 13 people

I wish people would learn how to spell and use proper grammar when spewing all their useless thoughts across the Internet! 

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