A credit score is a three-digit number that lenders use to determine whether you’ll get approved for financial products like credit cards and loans.
Credit scores typically range from 300 to 850, but there are dozens of versions — from base scores to industry-specific scores — that make it tricky to know which one you're being evaluated on during the application process.
You may check your score with your credit card company or on a personal finance site only to find it differs on another, making it hard to know what credit score range you fall in and which products you have the best chance of qualifying for. And when a lender pulls your credit score, they may request it from a differentcredit bureau— Experian, Equifax or TransUnion — and/or request a specific version that varies from the one you checked.
Most credit scores weigh the same factors, such as payment history, utilization rate, length of credit history, number of new inquiries and variety of credit products.However, there may be score differences for a variety of reasons, which CNBC Select breaks down below.
6 reasons why your credit score differs
- Credit scoring model used:There are several models out there for scoring your credit history. But typically, lenders use one of the two main credit scoring models — FICO or VantageScore.Both companies evaluate the same main factors of your credit history like payment history and utilization rate, but use their own formulas to weigh each factor.
- Score version: There are dozens of credit score versions that are broken up into base scores and industry-specific scores. Base scores, such as FICO® Score 8 or VantageScore 3.0, show lenders the likelihood you’ll repay any credit obligation. Industry-specific scores represent the odds you’ll repay a specific loan, such as the FICO® Auto Score 9 used in auto loan decisions.
- Credit bureau: Credit scores are calculated using data listed on your credit report, which comes from one of the three major credit bureaus — Experian, Equifax or TransUnion. Your score differs based on the information provided to each bureau, explained more next.
- Information provided to the credit bureaus: The credit bureausmay not receive all of the same information about your credit accounts. Surprisingly, lenders aren’t required to report to all or any of the three bureaus.While most do, there's no guarantee that the information will be the same across the board, creating potential differences in your scores.
- Date scores are accessed: If you view your credit score at different times, there may be discrepancies since one score may be outdated.
- Errors on your credit report: Your credit score can reflect any errors that appear on your credit report. If errors only appear on one bureau'sreport, then your credit score from that report may differ from another that has no errors. You should dispute errors on your credit report right away to avoid harm to your credit score.
Which credit score matters the most?
While there's no exact answer to whichcredit score matters most, lenders have a clear favorite: FICO® Scores are used in over 90% of lending decisions.
While that can help you narrow down which credit score to check, you'll still have to consider the reason why you're checking your credit score. If you're accessing your credit score simply to track your finances, a widely-used base score like FICO® Score 8 works. This version is also helpful for gauging which credit cards you qualify for.
If you plan to make a specific purchase, you may want to review an industry-specific credit score. FICO lists the specific scores that are used for various financial products. FICO® Auto Scores are ideal if you want to finance a car with an auto loan, while it's good to check FICO® Scores 2, 5 and 4 if you plan to buy a house.
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Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
FAQs
FICO® Scores☉ are used by 90% of top lenders, but even so, there's no single credit score or scoring system that's most important. In a very real way, the score that matters most is the one used by the lender willing to offer you the best lending terms.
What are the 5 factors that determine credit score which one is most important? ›
Knowing how credit scores are calculated can help you boost your standing if you pay close attention to these five criteria:
- Payment history.
- Amounts owed.
- Length of credit history.
- New credit.
- Credit mix.
FICO® Scores☉ are used by 90% of top lenders, but even so, there's no single credit score or scoring system that's most important. In a very real way, the score that matters most is the one used by the lender willing to offer you the best lending terms.
Why is one credit score different from another? ›
Scores are calculated using different credit reports.
Some lenders report to all three major credit agencies, but others report to only one or two. This means a credit agency may be missing information that helps or hurts your score.
Why are my TransUnion and Equifax scores so different? ›
Like all credit-reporting agencies, TransUnion and Equifax use proprietary scoring models. And while credit scores are typically based on the same or similar factors — including your payment history and number of accounts in good standing — each credit-scoring model can weigh those factors differently.
Which of the 5 C's of credit is most important? ›
Each of the five Cs has its own value, and each should be considered important. Some lenders may carry more weight for categories than others based on prevailing circ*mstances. Character and capacity are often most important for determining whether a lender will extend credit.
What 5 things are looked at when determining your credit score which is the biggest piece? ›
FICO Scores are calculated using many different pieces of credit data in your credit report. This data is grouped into five categories: payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%) and credit mix (10%).
Which of the 3 credit scores is most accurate? ›
Simply put, there is no “more accurate” score when it comes down to receiving your score from the major credit bureaus.
Which credit score do most places look at? ›
An Industry Standard for over 30 years
FICO ® Scores are used by 90% of top U.S. lenders. FICO ® Scores are also used in over 30 countries. Predictive.
Why are my credit scores so different on different sites? ›
Credit scoring models can weigh certain information in your reports more heavily than other credit score factors. For example, one scoring model may put more emphasis on total credit usage than others. Because there are varied scoring models, you'll likely have different scores from different providers.
However, the information they collect and how they report it can differ. For example, some creditors may supply information to one bureau but not the other. As a result, your Experian and Equifax credit reports may be different and the credit scores that are derived from them may differ, as well.
Why is there such a big difference in my credit scores? ›
Lenders don't always report information to all three bureaus, however, which means there are often differences among your credit reports (and the scores based upon them). Because your credit reports can differ, your scores are unlikely to be the same.
What do different credit scores mean? ›
Lower credit scores indicate that you are more likely to be a credit risk, while higher credit scores indicate that you are more likely to be a responsible borrower. Although there are different types of credit scores, the two main credit scoring models—FICO and VantageScore—use a 300-850 point credit scoring scale.
Do car dealers use TransUnion or Equifax? ›
Equifax and Experian are the most commonly used credit bureaus by auto lenders. They offer services that are directed specifically at the auto industry, and each gets a portion of their revenue from the industry.
Do banks use TransUnion or Equifax? ›
Credit card issuers and lenders may use one or more of the three major credit bureaus—Experian, TransUnion and Equifax—to help determine your eligibility for new credit card accounts, loans and more.
Which credit score matters the most? ›
More banks and lenders use FICO to make credit decisions than any other scoring or reporting model. Although borrowers can explain negative items in their credit report, the fact remains that having a low FICO Score is a deal breaker with numerous lenders.
What factor is more important in your credit score? ›
Payment history is the most important factor of your credit score, making up 35% of FICO® Scores. At Experian, one of our priorities is consumer credit and finance education.
Which of the five main criteria used to determine your credit score has the most influence over your score responses? ›
A FICO credit score is calculated based on five factors: your payment history, amount owed, new credit, length of credit history, and credit mix. Your record of on-time payments and amount of credit you've used are the two top factors.
What are the 5 levels of credit scores? ›
Here's how FICO breaks down credit scores:
- Below 580: poor.
- 580 to 669: fair.
- 670 to 739: good.
- 740 to 799: very good.
- 800 and above: exceptional.
Payment history and your credit utilization ratio are the two top factors that affect your credit score. Payment history shows your ability to make payments consistently and on time. This factor is so heavily considered because lenders will want to know how reliable you are when it comes to paying back your debt.
