Did You Know There Are More Than 10 Credit Scores?

Did You Know There Are More Than 10 Credit Scores

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How many types of credit scores are there? If you said one, you’d be wrong. If you said three, you’d still be wrong. There are actually more than 10 credit scores! Each one is used to estimate your creditworthiness within certain industries and situations.

1. VantageScore 3.0

VantageScore 3.0 is a joint effort developed by all three credit bureaus. It has the same credit score ranges as FICO does (300 to 850), but the calculation behind your score is completely different. So while it might be close to your FICO score, it’s not exact.

There’s more weight placed on your payment history and depth of credit compared to FICO. It also ignores collections accounts that have been paid. The calculation differences result in the average consumer VantageScore being 697 as of 2020. 

You’ll find VantageScore 3.0 used in most free credit score apps like Credit Karma or Credit Sesame. However, it’s not used in most credit or lending decisions.

2. VantageScore 4.0

VantageScore 4.0 is the most recent credit scoring model from VantageScore. It analyzes consumer behaviors across time to predict the likelihood of defaulting on payment obligations and assigns credit risk. 

The predictive modeling in VantageScore 4.0 tells a more complete story behind credit behavior rather than giving lenders a snapshot of your credit profile. 

It also distributes more scores to consumers without credit scores under traditional models. This expansion on previous credit scoring models allows an additional 37 million people to be assigned a credit score. 

3. FICO Score 8

FICO Score 8 was launched in 2009 and is currently the most widely used credit score to determine credit approvals. This score was designed to estimate a significant factor that lenders want to know–how likely it is for the applicant not to pay as agreed.  

Most times this score is applicable for new credit card applications, student loans, retail credit, and personal loans. It’s also used by all three major credit bureaus (Experian, Equifax, and TransUnion) to furnish your official credit score. 

The closer you get to a perfect 850 FICO score, the lower your credit risk is, and the more likely lenders are to approve you. 

4. FICO Auto Score 8

When you’re shopping for a new car, there’s a different version of FICO that auto lenders use to determine your credit risk. 

FICO Auto Score 8 is used by most auto-financing companies to assess your ability to meet payment obligations associated with a new car or auto refinance. This version of FICO is tuned to the specific needs and credit risks within the auto industry.  

The big difference between this and FICO 8 is the credit score ranges. Instead of it being 300 to 850, the FICO Auto Score ranges from 250 to 900. Lenders decide which score to use, but your auto lender will likely use this in place of your base FICO 8 to determine industry-related risk.

5. FICO Bankcard Score 8

Credit card issuers use another type of FICO score designed to assess the credit risk of credit card and bank card applicants. 

This is known as the FICO Bankcard Score 8. It’s designed specifically for credit card issuers with data points that support the repayment stats for that industry. It also has the same credit score ranges as the FICO Auto Score of 250 to 900. 

This industry-specific score is often used in place of FICO 8, but again, the lender ultimately chooses which one to use for assessing credit risk.

6. FICO Score 2, 4 & 5

Mortgage lenders rarely change which FICO scoring model they use, so you’ll likely find them using a much older version of FICO, such as FICO Score 2, 4, and 5. Traditionally, Experian uses version 2, Equifax reports version 5, and TransUnion reports version 4. 

Whether you’re buying a new home or refinancing your existing home, the mortgage lender you go with will use one of these older FICO versions along with your other financial information to qualify you for a loan.

7. FICO Score 9

FICO Score 9 is a newer version compared to FICO 8. There are features to this version that make it friendlier for consumers. For example, paid-off third-party collections accounts are no longer factored into scores. Medical collections also have a lower impact. 

A huge benefit for consumers is the consideration of rental reporting within the credit score. On previous FICO models, rental history isn’t accounted for and has no impact on your credit score. This allows previously unscored individuals to build credit history more easily.

8. FICO Score 10

This is the most recent version of FICO to be released. FICO Score 10 takes a similar approach to VantageScore 4.0 by using trended data to analyze consumer behaviors over extended periods. 

It also considers the increased debt consolidation through the use of personal loans along with historical credit limits and balances. The combination of all this information determines the credit risk of each individual in a full-picture view.

To continue learning about credit, see the following articles in the series:

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