A solid credit score is key to getting the best rates on loans, insurance, credit cards, and your mortgage.
But according to John Ulzheimer, who used to work for credit reporting agency Equifax and now blogs about credit, there are actually 49 distinct FICO credit scores.
That’s because the company that created the most widely used credit scoring formula, Fair Isaac – often just called FICO, like the score – has variations of the calculation for specific loan types. Their software gets updated every few years, and each of the three credit reporting agencies is using different versions of it.
Yeah, it’s confusing. Here’s how The New York Times explains it:
So there are three versions of the basic score [at Equifax, Experian and TransUnion], just for starters. But FICO also has several other versions, customized for the specific type of loan in question — say, an automobile loan, a mortgage or a credit card. Each is also offered by the credit bureaus, under their own brands. And each version may have multiple releases, as FICO’s formula for crunching the data is updated. So you can see how the versions pretty quickly add up to nearly fifty.
You can also check out the breakdown in the chart below. The Consumer Financial Protection Bureau released a report about the issue last summer, saying, “it is likely that the credit score that the consumer receives will not be the same score as that purchased and used by a lender to whom the consumer applies for a loan.”
That’s sort of like receiving a generic when you paid for a brand name – you didn’t get what you thought you did, just something that resembles it.
The CFPB report raises other issues stemming from having dozens of score variations: What if a lender uses a different (non-FICO) scoring model than the one you paid for? What if the lender gets your score from a different credit bureau than you do?
“It is also possible that a consumer and a lender could access different reports from the [credit agency],” the CFPB says, “if they were to use different identifying information about the consumer.”
While this might explain some fluctuations in your credit score, the fundamentals that make up the variations are the same, Ulzheimer says. So if the numbers aren’t where you want them, check out 18 Tips to Give Your Credit Score a Boost.
Also check out Money Talks News founder Stacy Johnson’s call to action, 5 Reasons We Need Free Credit Scores Now. We’ve had a free look at our credit reports for a decade through AnnualCreditReport.com. But seeing credit scores costs about $20.
If you agree something as fundamental to our lives as a credit score should be free, check out that story and sign the petition it points to.