Credit Advice

There is more than one FICO score

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Credit Advice

There is more than one FICO score

Dear Experian,

I recently tried to get a car loan and was told that my Auto FICO score was low. I found this strange because I know my FICO score is in the high six hundreds. The dealer explained that the difference is an Auto FICO score is different than a regular FICO score. Is this accurate?

- DHA

Dear DHA,

There is a pervasive myth that there is only one credit score. Sadly, that myth is being perpetuated by the media, some consumer advocates, and even certain risk scoring companies. I do not understand why, and it frustrates me tremendously.

Telling people there is only one credit score, or one “real” credit score misinforms, misleads, confuses and hurts consumers like you. Yet, organizations and individuals whose stated purpose is to inform and protect consumers are doing just that.

The fact is that there are many different credit scores, some estimate more than 1,000, being used by lenders and other businesses. The truth is that there isn’t even just one FICO score, although you often hear there is only one “real” score, and it is “the” FICO score. If that is the case, the question is which FICO score is the “real” one?

FICO is not the name of a credit score. It is an acronym for a company – Fair, Isaac Corporation. Fair, Isaac Corporation produces credit scores (note scores is plural, not just one) for lenders and other businesses. Any score from a system developed by Fair, Isaac Corporation is called a FICO score.

While there are generic FICO scores used for all types of lending, as you have discovered, there also are FICO scores for specific types of lending.

In your instance, the car dealer used a FICO score designed for auto lending. There are also FICO scores specifically designed for mortgage lending and insurance purposes. Further, there are FICO scores for specific types of lenders, such as credit unions or traditional banks. Adding to that, there are FICO credit scores created for specific lenders, called custom scores.

FICO is a good company, and it produces good credit scores. But it also has competitors, including Scorex, a credit scoring company owned by Experian, that also produce credit scores in much the same way. There are also lenders that produce their own credit scoring systems.  The newest score on the market, the VantageScore, was developed in cooperation by the three national credit reporting companies.

Saying there is only one “real” credit score is like saying there is only one “real” car. If that were true, General Motors would need to decide which car it manufactures is the “real” one and stop making all the rest.

The fact is that people and businesses have different needs for vehicles and General Motors produces many different cars to meet those specific needs.

While all cars operate on the same basic principles, they are all somewhat different depending on the specific use: passenger cars, vans, trucks, and so on.

Similarly, credit scoring systems all work on the same basic principles, but they all differ somewhat to meet a particular lender’s needs.

I’ve been told that it is too confusing for consumers to understand that there is more than one credit score. I think it is more confusing to be led to believe there is just one credit score and then to discover, as you did, that you were misinformed.

Thanks for asking.

- The "Ask Experian" team

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