Does the Type of Credit Score Matter?

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When you apply for new credit, the lender will almost always check one or more of your credit reports and credit scores. Lenders and other service providers use credit scores to gauge the amount of financial risk you pose as a borrower.

If your credit scores are high, you're seen as a low credit risk—meaning you're likely to repay your debt as agreed. Alternatively, if your credit scores are low, you're considered a higher risk in lenders' eyes. And while you have dozens—or even hundreds—of credit scores, if your credit reports reflect positive credit behavior, then all of your scores will likely be good regardless of the score brand or version.

What Is a Credit Score?

A credit score is a three-digit number usually ranging from 300 to 850 that lenders use to predict your credit risk. A credit score takes into account the information appearing on your credit reports as maintained by the three national credit reporting agencies (Experian, TransUnion and Equifax). Information that is not on your credit reports is not considered by credit scoring models.

What Are the Main Credit Scoring Models?

There are two commonly used brands of credit scores in the U.S. consumer credit environment: FICO®, named for the Fair Isaac Corp., and VantageScore®. Collectively, these two scoring brands account for over 20 billion scores used annually.


VantageScore credit scores have been around since 2006. There have been four versions of this credit score: VantageScore 1.0, 2.0, 3.0 and 4.0. Each VantageScore version is a single model used by all three national credit reporting agencies. As a result, if your credit reports are identical across all three agencies (which is unlikely), your VantageScore credit scores would also be identical.

FICO® Score

It's not as simple when it comes to FICO. FICO, the company, has been around since 1956, but its credit bureau scores debuted in 1989. Since then, it has released several dozen scoring models that are commercially available and in use in the United States.

FICO's scores are developed independently for each of the three credit reporting agencies. Each FICO® Score version includes a generic version for use by any lender, called the "base" FICO® Score. There are also different variants of the FICO® Score, formally referred to as FICO® Industry Adjusted Scores, which are semi-customized scoring models created for use by specific industries such as auto lending and credit card issuing. The recently announced FICO® Score 10 Suite is the most recent FICO® scoring model.

Where Can I Get My Credit Scores?

With so many credit scores out there, there's little chance all of them are the same, though they are likely to be similar.

There is no shortage of places where consumers can go to see their credit scores. Some are free and some are not. The credit reporting agencies all either sell credit scores or provide them at no cost. There are also various third-party websites that will either sell you a score or give you a free credit score in exchange for you becoming a registered user of their site. And finally, many financial institutions have partnered with either FICO® or the credit reporting agencies to give away either FICO® or VantageScore branded scores. For example:

Credit Score Providers
ProviderType of ScoreCost
ExperianFICO® Score 8Free
Credit.comExperian VantageScore 3.0Free
myFICO.comVaries by productVaries by product
CreditKarmaVantageScore 3.0 from both Equifax and TransUnion credit reportsFree
CreditSesameVantageScore 3.0 from TransUnionFree
EquifaxFICO® Score 5 based on Equifax report$14.95/month
TransUnionVantageScore 3.0 based on TransUnion report$24.94/Month
NerdWalletVantageScore 3.0 based on TransUnion reportFree
DiscoverFICO® Score 8 based on TransUnion reportFree

Are There Other Types of Scores?

While the FICO® and VantageScore credit scoring models certainly get most of the attention, there are other types of scores in use today. Some other examples include:

  • Insurance risk scores: An insurance risk score predicts either the likelihood that you will file an insurance claim or that you will be an otherwise less profitable insurance customer. FICO® builds insurance risk scores, as does LexisNexis.
  • Collection scores: A collection score, used by debt collectors, ranks debtors based on their likelihood of paying their collection account debts. FICO® creates collection scores.
  • Custom scores: Custom scores are credit scoring models built for use by one party, usually a lender or an insurance company. Custom scoring systems can take into account credit report data, credit application data and even other credit scores. Most mid- to large-sized lenders use custom scoring systems, as well as garden variety credit bureau scores.
  • Bankruptcy scores: Bankruptcy scores are designed to predict the likelihood that you'll file for bankruptcy protection.

How to Improve Your Credit Scores

While there are numerous credit risk scores that fall under the FICO® and VantageScore brands, they all consider the same information: your credit report data. Simply put, if you have great credit reports, you're going to have great credit scores, regardless of the score brand, variation or generation. And while the FICO® and VantageScore credit scores max out at 850, scores in the mid-to-high 700s are generally considered to be excellent.

Credit scoring models use roughly five categories of information to calculate credit scores. Both the FICO® and VantageScore scoring systems use the following metrics:

  • Payment history: How reliably you make on-time payments is very influential to your credit scores, accounting for 35% to 40% of your score. Negative information that could appear here includes late payments, bankruptcy, collections, foreclosures, repossessions and any record of account defaults. If you can avoid these negative events, you'll be well on your way to earning and maintaining great credit scores.
  • Credit utilization and other debt-related metrics: A common misconception about credit scores is that as long as you make your payments on time, you'll have great scores. Your debt load is also a very influential component of your credit scores. In fact, this category accounts for about one-third of your credit scores.
    This category considers the number of accounts with balances, your credit card balances relative to their limits (known as your credit utilization ratio), the percentage of your loan balances relative to loan amounts, and the amounts you owe across different types of accounts. In both the VantageScore 4.0 and FICO® 10T credit scores, your trended balance data is also considered.
  • Inquiries, credit age and account types: These three categories account for the remaining roughly one-third of your credit score calculation. Individually these categories are the least influential, but if you want top credit scores, then they are important.

These categories consider the number of inquiries on your credit reports in the past 12 months, the age of your oldest account (the more credit history you have, the better), the average age of your accounts, and the mix of account types on your credit reports.

Building Great Credit

Credit scores are commonly used by lenders and other service providers, and have been for decades. They are a numeric representation of the quality of your credit reports. If you have top credit scores, then you will have greater access to competitively priced credit from lenders.

To earn great credit scores, you need to follow a simple routine: Make all of your payments on time, always; maintain low or no credit card debt; and only apply for credit when you need it. If you can do these things, then your credit scores—all of them—will reflect your positive credit behavior.

How Good Is Your Credit Score?

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