Which credit score is your ‘real’ score?

Many for-profit companies selling you the chance to get your credit score. Consumers should know the difference between a FICO score and a VantageScore.

With various advertisements telling consumers how to access their credit score, how is a person supposed to know what score is the “real” score? Michigan State University Extension encourages consumers to educate themselves about their finances, particularly their credit report and credit score.

No matter what you are buying – a home, a car or charging items on your credit card – lenders and other creditors use a credit score to assess the amount of risk they will be taking by lending you money. The FICO score has been the industry standard credit score used to determine more than 90 percent of lending decisions in the United States. FICO derives its name from the Fair Isaac Corporation, the company that created the industry standard for credit scores.

So what is a VantageScore? The VantageScore was created by the three major credit reporting bureaus – Experian, TransUnion and Equifax – a as a general-purpose credit score that is an alternative to the FICO credit score. In addition, the VantageScore was designed to enable more consumers with limited credit histories to receive a credit score for the first time when a credit check is completed.

According to Credit Builders Alliance the VantageScore is reported on a scale from 501-990 with higher scores representing better credit. This is different from the traditional FICO score range of 350-850. VantageScore also gives consumers a friendly grade ranging from A-F in addition to the score.  FICO does not provide a letter grade for its score. VantageScore solutions reports that the VantageScore model and VantageScore credit scores are marketed and sold independently by Equifax, Experian and TransUnion through licensing agreements.

However, there is more to the credit score story. Equifax’s website states, “The Equifax Credit Score is a proprietary credit model designed by Equifax. It may be calculated using the information contained in your Equifax, Experian and Transunion Credit Files. The score is intended solely for your educational use.” In addition Experian provides an “Experian” credit score that ranges from 330 to 830.  

The bottom line for consumers is there are many real credit scores used by lenders or creditors and they have no control over what’s reported to each credit bureau at any given time. It’s up to you to know which score your lender or creditor is using to determine your credit worthiness and important that you check your credit report for accuracy. Only one website is authorized to fill orders for the free annual credit report you are entitled to under law — www.annualcreditreport.com or by calling 1-877-322-8228.

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