Save Money by Finding Out Which Credit Scores Lenders Use

which credit score do lenders use

Are you in the market for new credit? Let’s say you’re thinking of buying a car or a home. You save up a down payment. You make a wishlist of what you want and need. And you start researching your options. Finally, to make sure you’re truly ready to buy, you look up your credit score.

That’s it, right? You’re now as informed as you can be and ready to shop.

Not so fast.

As smart as it is to stay on top of your credit score, that’s not the end of the story. You also need to be able to answer, “which credit score do lenders use?” Because the credit score lenders see isn’t the same as the one you see.

What types of credit scores exist?

By now it’s fairly common knowledge that everyone has more than one credit score. As crazy as it might sound, this doesn’t happen in an effort to confuse consumers. It’s the result of there being more than one major credit score developer. And each one has multiple versions of their scores as well as industry-specific scores.

To get started, you should know who’s making these credit scores. The top two are FICO and VantageScore.

The FICO Score

The FICO credit score was created by The Fair Isaac Corporation in 1989. The first-ever credit score, it was created to enable an unbiased way to make lending decisions.

With the advent of this score, people would be approved or denied for credit based on their past and current credit behaviors instead of their connections, race, or other factors that had nothing to do with credit.

FICO is now the leading credit score on the market in the U.S., used by 90 percent of lenders. And it’s been around long enough to now be up to nine versions of its basic score, with the FICO Score 8 being the most widely used.

Besides the basic FICO Score, there is also a FICO Auto Score and a FICO Bankcard Score, with multiple versions of each.

The VantageScore Credit Score

VantageScore, unlike FICO Score, was not created by an independent agency, though it is now owned by one. This score came about as a collaboration between the U.S.’s top three credit reporting agencies – Experian, TransUnion, and Equifax – and was launched in 2006.

This score was specifically created to take credit scores to the next level by making them more predictive. Where the FICO Score is limited to scoring consumers based on their basic credit behaviors, VantageScore’s formula is designed to go more granular on data from credit reports.

This granular look allegedly enables those who haven’t been able to build as much credit history to still be scored. And that gives access to credit to many consumers who wouldn’t have had it otherwise – 30 to 35 million more consumers, in fact.

Like FICO Score, VantageScore has more than one version – it’s getting ready to release its fourth version in the Fall.

Which credit score do lenders use?

It can be hard to keep up with all the credit scores and versions out there. And as nice as it is to know where you stand on them, the score lenders are using are the most useful to know.

So what credit scores do lenders use?

It depends. But you can get a decent idea of which based on the type of credit you’re applying for. (Though that doesn’t mean you’ll be able to see that exact score.)

For example, since 90 percent of lenders use the FICO Score, then you can probably rely on that being the one that’ll be checked. But VantageScore is growing fast – more than 8 billion VantageScore credit scores were used from 2015-2016.

Say you’re shopping for a car and your lender is using FICO. In that case, your lender is probably using the FICO Auto Score. But for a credit card, they’re probably using the FICO Bankcard Score.

Not only can you take an educated guess on the score they’re using, you can use this chart from myFICO to take a stab at which version of the score it might be:

what credit scores do lenders use

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While you aren’t likely going to be able to see these scores yourself – most scores consumers can see are educational credit scores – you can use common sense to get an idea of how you’re doing based on the score you can see.

For example, it’s probably safe to say that the formula used for the FICO Auto Score might put more emphasis on your past payment history with auto loans than other types of debt. The same could theoretically go for your credit card history and the FICO Bankcard Score.

How to find and use your credit score

While it would be nice to always know what credit scores do lenders use, that’s not always possible. Up until a few years ago, it was hard enough to catch a glimpse at your credit score at all. Thankfully, that’s changing.

Not only can you now see some versions of your score, you can do it for free. VantageScore has a list of providers that provide free credit scores and you can find a list of various types of credit scores here.

As for what to do with your score, use it to time purchases. VantageScore and FICO scores typically range from 300-850 (though some versions go higher). If your score is below 700, you might want to hold off on taking on new credit for a large purchase.

The lower your score is, the higher your interest rate will be. And since something like a home comes with a fixed rate and a long repayment period, that higher rate can cost you quite a bit when compounded over time.

This is why it pays to know your score. If you wait and practice good credit behaviors for two years, you can increase your score enough to qualify for a lower rate. Good credit behavior means paying off any collections accounts, reducing your current debt as much as possible, and never missing a payment or paying late on a bill.

And if you take those two years to improve your score, you’ll also have bought yourself more time to save a down payment. And that will enable you to reduce the total amount of debt you have to take on.

Knowing your credit score and using it to time your large purchases wisely can save you money. There’s simply no reason not to check your score.

Interested in a personal loan?

Here are the top personal loan lenders of 2018!
LenderRates (APR)Loan Amount 
1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Finance Lender Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (
  2. Personal LoansFixed rates from 5.49% APR to 14.24% APR (with AutoPay). Variable rates from 4.98% APR to 11.44% APR (with AutoPay). SoFi rate ranges are current as of December 21, 2017 and are subject to change without notice. Not all rates and amounts available in all states. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 4.98% APR assumes current 1-month LIBOR rate of 1.34% plus 3.89% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

2 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Personal Loan Rate Disclosure: Fixed interest rates range from 5.99% – 16.24% (5.99% – 16.24% APR) based on applicable terms and presence of a co-applicant. Lowest rates shown are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  2. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  3. Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.
7.39% - 29.99%$1,000 - $50,000
Check rate nowon SLH's secure site
4.98% - 14.24%1$5,000 - $100,000
Check rate nowon SLH's secure site
8.00% - 25.00%$5,000 - $35,000
Check rate nowon SLH's secure site
5.99% - 16.24%2$5,000 - $50,000Visit Citizens
5.99% - 35.89%$1,000 - $40,000Visit LendingClub
5.25% - 14.24%$2,000 - $50,000Visit Earnest
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Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print, understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.