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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. That, in turn, may depend on the type of loan or credit you need, your credit history and the lenders you seek out.
Why There Isn't a Single, Most Important Credit Score
There are several reasons why there isn't one credit score on which consumers should place their sole focus.
No Score Is Universal
No single credit score can be considered most important because it's practically impossible to know exactly which score any given lender will see when they process your credit application. Lenders have considerable choice among commercial credit scoring systems, or scoring models, including at least 16 different versions of the FICO® Score and four versions of the rival VantageScore®.
The Same Number Can Mean Different Things
The most common scoring models, VantageScore 3.0 and 4.0 and the general-use versions of the FICO® Score, assign three-digit scores on a range of 300 to 850, with higher scores indicating greater creditworthiness. Even when they share the same scale, however, it's important to know that a specific score can mean something different depending on the scoring model, and even which version of that model, is used to generate it.
A "Good" Score Depends on the Lender
Lenders typically select one or more scoring models after testing its effectiveness with their loan offerings and target customers. While one lender might fine-tune its scoring methods to identify the most creditworthy of borrowers, another might focus on riskier borrowers, and use scoring to better understand them. Some lenders even feed scores from the FICO® Score or VantageScore models into their own custom-built scoring models to better understand potential customers.
Scores Can Vary by Data Source
Commercial scoring models generate scores using credit report data from one of the national credit bureaus (Experian, TransUnion or Equifax). Because your credit reports at all three bureaus are rarely identical, it's virtually impossible to predict what score a lender will receive or use when deciding if you qualify for a loan, or when deciding what interest rate and fees to charge you. Recognizing this, many lenders use scores generated from two or even all three bureaus when performing credit checks.
Most Important Credit Scores by Role
The variety of credit score models and versions available today can make it tough to predict which score any lender will use, but different models and versions are more popular than others for specific lending applications. Here's a list of the scores you're likeliest to encounter in various settings.
Most Important Credit Score for Monitoring Your Credit
FICO® Score 8. The FICO® Score 8 is currently the most widely used version of the FICO® Score. You can check it for free from Experian and other sources, so it's easy to track. While there's no guarantee the score you see when you check yourself will be identical to the one a given lender will see, FICO® Score 8 will give you a good idea of how lenders will view your credit profile.
Most Important Credit Score for a Credit Card Application
FICO Bankcard Scores 8 and 9. The FICO Bankcard Score, which debuted in 1993, is fine-tuned for determining the creditworthiness of credit card borrowers. It uses a scale range of 250 to 900, and versions 8 and 9 of this score are widely used by credit card issuers. You can get your Bankcard Score through the three national credit bureaus and possibly your credit card company.
Most Important Credit Score for a Mortgage
FICO® Scores 2, 4 and 5. Known as "classic" FICO® Scores, these older versions of the generic FICO® Score are widely used by mortgage lenders because they are included in criteria that make conforming mortgages eligible for purchase by the government-backed mortgage-funding corporations Fannie Mae and Freddie Mac. They use the traditional 300 to 850 score range.
- FICO® Score 2 is the "classic" FICO® Score version available from Experian.
- FICO® Score 4 is the version of the classic FICO® Score offered by TransUnion.
- FICO® Score 5 is the Equifax version of the "classic" FICO® Score.
Most Important Credit Score for an Auto Loan
FICO Auto Score 8 and FICO Auto Score 9. Tailored for use by providers of auto financing, the FICO Auto Score uses a score range of 250 to 900. Versions 8 and 9 of the model are widely used by auto lenders, and available from all three national credit bureaus.
How to Improve Your Credit Score
While uncertainty about which score will apply to a credit application may seem nerve-wracking, the good news is that all scoring models tend to respond favorably to the same set of good credit management habits, including:
- Pay your bills on time, especially all debt payments. Payment history accounts for about 35% of your FICO® Score, making it the most influential factor in your scores.
- Keep credit card balances low. Lenders see high credit card balances as an indicator of risk, so scoring models will lower scores if your total card balance exceeds about 30% of your total borrowing limit. That said, keeping balances under 10% of limits can help you achieve top scores. Credit utilization accounts for about 30% of your FICO® Score.
- Bide your time. Credit scoring models reward borrowers with long track records of responsible credit management. In other words, if you keep up with your payments and mind your balances, your credit scores will tend to improve over time. The ages of your open credit accounts, which serve as a measure of experience, are responsible for about 15% of your FICO® Score.
- Maintain a healthy credit blend. Scoring models tend to boost the scores of who can handle multiple types of debt at the same time. A mix of installment loans with fixed payments (student loans, mortgages, auto loans and the like) and revolving credit (accounts like credit cards that allow charging against a set borrowing limit) will tend to increase your score. Credit mix is responsible for about 10% of your FICO® Score.
- Seek new credit only as needed. The number of recently opened credit accounts in your credit report, and the number of hard inquiries reported by lenders when you apply for credit, account for 10% of your FICO® Score. Lenders see too many new accounts or recent inquiries as indicators of increased risk, so they can hurt your credit scores.
The Bottom Line
While no single credit score can claim the title of "most important," credit scores in general can be very important to your financial future. Taking steps to improve your credit, and marking your progress by tracking your credit score for free are great ways to prepare for home buying, seeking a car loan or otherwise using credit in pursuit of your dreams.