You Won’t Believe How Many Credit Scores You Actually Have

types of credit scores

When it comes to your finances, your credit score can play a huge role in your adult life. Credit scores are a numeric value that lenders use to assess how good you are with borrowing money and paying back bills on time.

Your credit score — depending on how high or low it is — can mean the difference between getting approved or denied for an apartment, credit card, or car loan. In other words, this three-digit number can influence a lot in your adult life.

If you’re interested in improving your credit or simply maintaining it, you need to keep tabs on your credit score. You’ve likely heard of the FICO credit score, but did you know there are many different types of credit scores out there?

Find out how many types of credit scores there are and which ones are the most important.

How many types of credit scores are there?

While FICO (which stands for Fair Isaac Corporation) is used in 90 percent of lending decisions, there are other credit scoring models used by lenders.

I fell into the trap of thinking there was just one type of score — FICO is so prominent, that’s all I thought was out there.

But it turns out that’s not true. There are different credit scores, even within the FICO system. For example, FICO has different versions depending on the type of loan you are applying for.

“Most people are familiar with their generic FICO risk score — which differs at each of the bureaus [and] has multiple versions, along with industry overlays,” says credit expert Kevin Haney of Savvy On Credit.

“On top of that, the VantageScore is a new variation gaining ground. In addition, most lenders utilize customized scores to fine-tune their decisions,” he adds.

Say what? That means you have a lot of different credit scores, each with their own nuances. This is important to know because when you check your credit score, especially at multiple places, it might be slightly different (so no reason to be alarmed.)

Many credit scoring models are similar, but they’re not identical. This can account for the difference in numbers if you use a free site to monitor your credit score, compared to accessing your credit score through FICO. They’re not necessarily using the same scoring methods, so there will be variations in your credit score.

“There are more than 40 different scores out there,” says Howard Dvorkin, CPA and Chairman of Many of the variations in credit scores come from lenders who have their own calculations for credit scores.

“A bank using a FICO or Vantage score to make an underwriting decision is like a consumer buying a suit off the rack. It just will not fit quite as well as a custom-tailored suit,” Haney adds. “Custom scores are both far more predictive, and far more numerous — each lender has their own set, and can employ many different variations.”

Why does this matter?

Knowing that there are different types of credit scores is important because each lender may have their own credit score for you, depending on the model they are using.

Haney notes that “lenders also prefer using a score tuned to the population they target. A specific segment of the market can behave very differently than the general population.”

Which credit score should you focus on?

There may be over 40 credit scores out there, but two reign supreme: FICO and VantageScore are used in the majority of lending decisions.

“These are the two [scores] most lenders look at before deciding to offer you an interest rate,” says Dvorkin. “You can drive yourself crazy trying to keep up with all the others, which often have very specific purposes and are hard to decipher. So really, focus on FICO, and if that’s good, everything else will fall into place.”

Keeping all of your credit scores in good shape

Though there are different credit scores out there, there are ways you can keep all your scores in tip-top shape — regardless of the credit score model. Here’s how:

  • Pay your bills on time! Lenders want to know how reliable you are with making payments.
  • Pay off your credit card balances in full. This will be good for your credit and help you avoid interest charges.
  • Keep your balances low, compared to your credit limit. Don’t charge your credit card to the max.
  • Don’t open too many credit accounts at once — that can appear risky to a lender.

By following these tips, you can maintain or build your credit, and keep all of your credit scores looking good.

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