49 Credit Scores and Counting – Enough Already FICO!!!

49 credit scores and counting... how many credit scores are thereWe’ve been telling our clients for years, the credit score you see when you buy your credit reports and scores, is NOT the credit score the lender sees.  In fact, it is more of a guideline to help you know if you are even within the game, rather than a determining factor in whether or not you will be approved.

It turns out that there are at least 49 different versions of the FICO scoring model that are sold to different lenders, and potentially hundreds of different scores being sold.  While this is no news to us and our clients, it looks like CNN has finally caught wind of this bait and switch by the credit bureaus and Fair Isaacs, the creators of the FICO score.

While you receive only one type of FICO score, lenders can choose from a variety of scores based on the kind of loan you’re applying for. So if you want an auto loan, the lender can look up your FICO auto score. Apply for a credit card and there’s a specific FICO bankcard score lenders can use, said Ulzheimer.

There’s also a FICO mortgage score, an installment loan score and a personal finance score that specifically focuses on your history of using financing companies — for example, if you’ve signed up for store-branded credit cards. Then there’s the generic FICO score, which is the most widely used score and is calculated based on your history with all forms of credit.

Even though newer versions of FICO’s scoring software are being used, many credit reporting agencies continue to make older versions of the software available to lenders — adding to the overall number of FICO scores for each consumer, said Ulzheimer.

FICO did not immediately respond to a request for comment.

“The lender is going to choose the [scoring] model they think is most appropriate for what the consumer is applying for,” said Ulzheimer. “[FICO is] trying to further differentiate the risk of doing business with a consumer generically versus for a specific product. For example, I care how you pay your auto loans for any decision, but I really care about how you paid your auto loan if you’re applying for an auto loan.”

These scores are for lenders’ eyes only, said Ulzheimer. When you request your FICO score, you receive the generic version. And the score you get may be about 15 or 20 points higher or lower than the score the lender is using to screen you, said Ulzheimer.

The discrepancy between the scores lenders and consumers receive was the subject of a report issued last year by the Consumer Financial Protection Bureau that showed that scores may differ for a variety of reasons, including the use of different scoring models by credit reporting agencies and that lenders and consumers don’t always get scores from the same reporting agency. To more closely compare the scores lenders and consumers receive, the CFPB said it would obtain data about credit scoring from FICO and from each of the three credit bureaus.

Rod Griffin, director of public education at Experian, said Experian provides different FICO scores to lenders depending on the kind of risk they are trying to assess. And he said consumers don’t need to see every single score, because they are all based on the same information contained in a credit report — some scores just weigh certain types of lending information differently. So just because a consumer is seeing a different score doesn’t mean that a lender is looking at different information.

“There’s a tremendous focus on these numbers, but what’s really important is the credit report — your credit report is what’s used to calculate all of those scores, and you control what’s on your credit report,” said Griffin….

More at You have 49 FICO credit scores

So next time you buy your consumer credit report and score and are shown that you have a score of 725, but the car dealer tells you that it is really a 645, know that he purchased one of the other 48 credit scores, and the scores can vary widely.

However, even though the scores are different, remember they are all based on the same information in your credit report, just looked at a little differently.  Bottom line, improve what’s included in your credit report and you will improve ALL 49 of your FICO scores.

About Anthony Candella

Anthony is the founder and Directing Attorney of YourCreditAttorney.com and has been helping consumers just like you understand and improve your credit and financial situation since 2003.

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  • MikeJay

    once again more BS for the American Consumer to deal with… standardize the formula and remove the incredible amount of variation in the formulas so we as comsumers can understand what we are looking at, and what we can afford… this is all BS to milk the Americans outta more money at the table…..