Free Credit Score

What you Need to Know About FICO & VantageScore

If you spend much time reading personal finance magazines or Web sites, it’s understandable that you’d think you have but one credit score. After all, how many articles out there have titles like “Understanding Your Credit Score,” “Protect Your Credit Score,” and “How to Raise Your Credit Score?”

Other folks with more credit experience might think we have three credit scores — one for each of the three major credit bureaus — Experian, Transunion and Equifax.

In fact, you probably have more than 50 credit scores!

Why So Many Credit Scores?

Credit scoring involves two major scoring companies, three major credit bureaus, and several categories of financing types. Reports geared to consumers often offer an educational score, and those scores aren’t ever used by lenders – but they can still be used as an indication of your overall creditworthiness. With the three bureaus, there are reports and scores designed to meet the needs of different kinds of creditors — for example, mortgage lenders, auto dealers and furniture retailers.

The Biggies: Scoring Systems

To better understand how this all works, you should know that there are two main credit scoring models used by most lenders:

FICO (from the Fair Isaac Corporation)

FICO is the oldest system, dating from 1956. Fair Isaac makes its money creating and selling proprietary scoring systems to lenders and credit bureaus. FICO has built many types of credit scores — its Web Site indicates that there are 49 different FICO scores. These are the “big six.”

  • Generic FICO Score
  • FICO Mortgage Score
  • FICO Auto Score
  • FICO Bankcard Score
  • FICO Installment Loan Score
  • FICO Personal Finance Score

But wait; there’s more. FICO creates customized scores for the major credit bureaus, like these:


  • Pinnacle Score
  • Beacon Score — mortgage
  • Beacon Score – auto
  • Beacon Score – bankcard
  • Beacon Score – installment loans


  • Experian Risk Score – mortgage
  • Experian Risk Score – auto
  • Experian Risk Score – bankcard
  • Experian Risk Score – installment loans


  • TransUnion Risk Score – mortgage
  • TransUnion Risk Score – auto
  • TransUnion Risk Score – bankcard
  • TransUnion Risk Score – installment loans

But wait; there’s more. FICO is not the only player in the credit scoring universe.


The other major credit scoring model is called VantageScore, and it launched in 2006. VantageScore was invented as a combined effort by the three bureaus, and it competes with the FICO score. Although the credit bureaus still continue to work closely with FICO (it’s still the most popular credit scoring system), they also sell their own credit scoring model to lenders.

The newest version of this model, called VantageScore 3.0, uses a wider range of factors, which allows it to generate scores for consumers who previously didn’t meet minimum trade line requirements. It also uses “reason codes” to explain to consumers why they have high or low scores.

Your VantageScore may vary from bureau to bureau — for example, if you have an auto loan that you always pay on time but for some reason the finance company did not report your account to Transunion, your TransUnion credit score would look lower than your Experian score, even if both scores were calculated using the VantageScore model.

Here’s a list of some of the VantageScores available:


  • VantageScore – mortgage
  • VantageScore – auto
  • VantageScore – bankcard
  • VantageScore – installment loans


  • VantageScore – mortgage
  • VantageScore – auto
  • VantageScore – bankcard
  • VantageScore – installment loans


  • VantageScore – mortgage
  • VantageScore – auto
  • VantageScore – bankcard
  • VantageScore – installment loans

It’s a little overwhelming, isn’t it? We’re looking at over 30 scores here.

Checking Your Credit Score

There are a lot of sites where you can get a “free credit report” (for best results, use the government’s or pay a modest fee for your credit score. Is it worth doing this, though, if that isn’t the score that lenders use anyway?

Checking your report and your credit score can still be helpful because most reports and scores are similar — if there are errors to fix or problems to solve, you should be able to make changes. You can quickly and easily check your free credit score using My LendingTree.

Before checking your score on one of these sites, find out which system they use. For example, if it’s a score from, you may get an Experian Risk Score or an Experian VantageScore. If you’re on another site, read their information to find out which credit bureau and which score they use.

Knowing that your VantageScore is much better than your FICO might help you get a better deal when you shop for a lender — ask what score they use before you apply for a mortgage, car loan or other financing.

Knowing the Score

Because you have so many credit scores, you might feel as though you’re trying to hit a moving target. For example, you pull your credit and get a 740 FICO — Yay! That score gets you the best mortgage rates lenders have to offer. But what if you contact a lender and are told your FICO is only 730, so you’ll have to pay more for your home loan? If you hadn’t checked your own credit, you might accept the lender’s word and pay more for your loan. Or you could show your credit report and negotiate a better deal or go to another lender with a better scoring system.

The Consumer Financial Protection Bureau (CPFB) studied credit reporting and the difference between scores sold to us and those sold to lenders, and found that for 73-80% of consumers, different scoring models placed them in the same credit quality category. For 19-24% of subjects, the lender score was one category off from the educational score they received. And 1-3% of consumers got lender scores that placed them two or more categories from the bucket suggested by their educational score.

Shop ’til it Drops!

As a result of its study, the CFPB recommends that people shop a bit harder for credit.

Regardless of variations in educational and commercial scores, or even among scoring models used by lenders (which was analyzed in this study in only a very limited and somewhat indirect manner) consumers benefit by shopping for credit. Even if provided the same score, lenders may offer different loan terms because they operate different risk models or face different competitive pressures. Consumers should not rule themselves out of seeking lower priced credit due to assumptions about their credit score.

Especially for larger purchases like real estate, it really pays to shop for the best credit scoring model, which could deliver the lowest interest rate.


Sign-up For Free Credit Score