Which credit score is most important? Why you have more than one — and how to raise them all.

Which credit score is most important? Why you have more than one — and how to raise them all.
Which credit score is most important? Here’s what you need to know. fizkes/Asier Romero
Which credit score is most important? Here’s what you need to know. fizkes/Asier Romero

There’s one pesky number that pretty much defines you as a credit-worthy consumer — or not: your credit score. Affecting everything from whether you can get a loan or good credit card to how much you’ll pay in interest, those three digits have an outsize influence on your financial life.

But the weird thing about credit scores? You actually might have a bunch of different ones, all at the same time. If you check your score on a regular basis and have made a point of taking steps to raise it, you may notice that any time you log onto a site like Credit Karma, Wallet Hub or that of your card issuer, you get slightly different numbers from each.

This discrepancy in your scores can be confusing, but the good news is you usually don’t have to stress about it, experts say. While score discrepancies of more than 30 points can be cause for worry and are worth looking into, there are a number of explanations for smaller differences in your scores, from when the different services check your reports to differences in scoring scales.

Instead of fretting about minor discrepancies in your score, you should first make sure the information on your (free!) credit report is accurate and that you’re monitoring at least one of your reports each year. “It is most important to know what is on your credit report,” Jeanne Kelly, a credit coach at Jeanne Kelly Academy said in an email. “Then no matter what score is tracked, it is tracking accurate information.”

You can get a free report at AnnualCreditReport.com. But if you want a better understanding of how credit scores are generated, read on. Here are five key things to know — including how to take better control of your credit.

1. You have more than one “real” credit score.

While everyone talks about their credit score as if it is a single number, you actually might have more than a thousand of them.

Credit scores are generated by many companies but two are the best known: Fair Isaac and VantageScore. Fair Isaac uses a proprietary formula to generate your FICO score, while VantageScore, which was developed by the credit reporting agencies Equifax, Experian and TransUnion, uses a different formula to generate the eponymous VantageScore.

But just because there are two main companies generating your credit score, that doesn’t mean you only have two scores. At any given time, you have multiple FICO scores as well as multiple VantageScores, because credit reporting agencies, mortgage issuers and credit card companies all generate scores of their own, some of which are based on your FICO or VantageScore.

For example, Citi uses the FICO Bankcard Score 8 model, which is scored on a scale of 250 to 900 and is based on data from Equifax. The latest VantageScore, in contrast, uses a different scale, of 300 to 850.

Why do we need so many credit scores? Because different lenders focus on different factors in determining the likelihood that a consumer will default on a loan. “Companies and lenders have created different credit scores to account for those differences and adapt them for their needs,” said Bethy Hardeman, a chief consumer advocate at Credit Karma.

They “just weigh different factors or time periods differently,” Hardeman added. For example, some may weigh your credit utilization more heavily than the average length you’ve had accounts open.

2. Your scores may also be calculated based on different information.

Not only do lenders use different formulas to calculate your credit worthiness, but they also may be drawing from slightly different information to determine your score. “You also have Experian, TransUnion and Equifax, so you have three different credit reports with different information,” Kelly said.

For example, if one score is based on data from the first day of the month and the other based on data from the 15th of the month — and you’ve paid off your balance or made any other changes during that time — your score may be different from one source to the next.

While your credit reports usually should have a lot of overlap based on what they contain, not all lenders report to the same credit card bureaus, and lenders report to different credit bureaus at different times, Credit Karma explained.

3. You’ll never know all of your credit scores.

If you like to be in the know, you might want to find out what all of your different credit scores are. While it’s vital to have a clear understanding of whether you have good or bad credit — lower than 650 is typically bad news and higher than 700 is considered good — it’s not feasible to find out every score you have. “Consumers will see slight differences between their FICO, Vantage or any other score — each consumer has over 1,000,” WalletHub analyst Jill Gonzalez said in an email.

While you can easily get some scores from free services and your card issuers, there are some scores you’ll never know. That’s because lenders typically keep their own formulas a tightly held secret and won’t share how they’ve scored you.

“The credit scores a lender will use will most likely differ from any score you can get yourself,” Hardeman said. “Some credit scores are not sold or available to the public.”

4. You (usually) don’t have to stress about the differences in your scores.

If you’re worried about whether one lender’s wonky formula could end up costing you more in interest or lead to a denied loan, the simple answer is no. “Despite the slight differences, major scores are relatively the same,” Gonzalez said. Just 1% to 3% of consumers surveyed had significant differences between their FICO and VantageScore credit scores, according to a Consumer Financial Protection Bureau study.

If you do have a big variation, with a discrepancy of more than 30 points, this could be a cause for concern because it may mean that scorers could be seeing different information on different credit reports.

But before you panic, check the scale being used. If one score is reported on a scale that goes up to 850 and the other on a scale that goes up to 900, your numbers could be off by a wider margin. As long as your score is higher on the scale that goes up to 900, you should be okay.

5. Here’s how to keep tabs on your score.

While you can’t know all of your scores, you can keep careful track of your overall creditworthiness and shape your behavior to improve your credit.

Your best option: “Track any one of your scores over time.” Gonzalez advised. “Knowing whether your score is improving or declining is very telling to your overall financial health.” How to know if you are tracking the same score? Check the same service each month instead of switching around from site to site and getting confused. If you see a sudden, unexpected change, pull your credit report to see what’s going on and check the scoring site to find out if they recently changed their model.

Focusing on one credit scoring model will give you a pretty clear idea of where you stand overall. “If you’re rated ‘good’ in one model, it should be ‘good’ for most other models, too,” according to Hardeman.

Finally, focus on behaviors you can control, like paying all of your bills on time and checking your credit report for mistakes. Follow these simple tips for improving your score, (bonus tips here on how to do so without a credit card) and you should bring up your number on all scoring models even the ones you can’t see.

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