Is There More Than One Credit Score?

The free credit score that your bank, credit union or credit card providers furnish when you check your credit is just one of many credit scores that you might have. When you apply for a mortgage, there’s no guarantee that the score you get from your credit card company is the same one that your lender will see when it checks your credit history.

This usually isn’t a problem. If the score your bank provides you with is high, the odds are that the score your lender pulls when you apply for a loan will be high too. The numbers might not match exactly, but if you see a good credit score from your bank, your lender will usually see a good credit score too when it checks your credit.

What score do lenders use?

Two main companies produce credit scores, namely, FICO and VantageScore, with FICO being the most common score used by mortgage lenders. Experian states that 90% of major lenders use FICO scores to determine which borrowers qualify for loans.

To make matters more complicated, there are several different versions of VantageScores and FICO scores. Experian says that FICO Score 8, a newer version of this score, is particularly popular among lenders. When you apply for a mortgage, the chances are high that your lender will use this score to determine if you qualify.

You’ll also have FICO scores from each of the three national credit bureaus of Experian, Equifax and TransUnion. Your FICO score from TransUnion might be a point or two higher than your score from Experian. Usually, though, these scores are similar. If your Experian credit score is high, your scores from TransUnion and Equifax will typically be strong too.

Finally, there are industry-specific scores. Some lenders might use the FICO Auto Score if you are applying for an auto loan, while some might rely on the FICO Bankcard Score if you are applying for a credit card.

How do the credit scores differ?

VantageScores and FICO scores come with slight differences. FICO scores range from 300 to 850. So do newer versions of the VantageScore. Older versions of the VantageScore, though, range from 501 to 990.

You’ll usually need at least one credit account or loan that is at least six months old to have a FICO score. With VantageScore, you’ll need just one credit account or loan in your name of any age to get a score.

This can be helpful, but don’t focus too heavily on which score your lender uses. Instead, concentrate on building a strong overall credit history. This means paying your bills on time each month and paying down your credit card debt. Doing this will ensure that your credit score is strong, no matter which version your mortgage lender is using.