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Nearly 20 Different FICO Scores: How do they impact your credit?

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This article was last updated Oct 09, 2017, but some terms and conditions may have changed or are no longer available. For the most accurate and up to date information please consult the terms and conditions found on the issuer website.

Most people think that there is one FICO score that gives lenders a snapshot view in numerical form of their credit worthiness. FICO, however, has revealed that it currently offers lenders as many as 19 or more credit scores that are each calculated somewhat differently, based on various kinds of data and the use of unique mathematical algorithms.

It’s Complicated

If this sounds very confusing, it’s not your fault. These days the world of credit scoring is a complex place and it is probably going to grow even more complicated over time. Agencies like FICO are coming up with all kinds of new ways to drill down on consumer data to control risk, improve their balance sheets, and do a better job of marketing products to their ideal customers. For some consumers, this could pave the way to a better credit rating, but for others, it may result in your loan and credit applications being rejected.

Multiple FICO Scores

FICO Score 8 is the name used for the most common and popular scoring model – the one you’ll see if you have a credit card that shows you your FICO score each month. In each industry though, there are different risk factors. Lenders who make auto loans, for instance, are far more concerned about your age and driving record than lenders that you approach for a mortgage or credit card. Similarly, there are now a bunch of different sector-specific types of FICO scores that lenders can pay for in order to evaluate your credit in more targeted and specialized way. So which credit scoring model will the lender use to determine your creditworthiness? That depends on the lender and what their policy is. Even if you track down all of those scores, in other words, it still might not give you the information the lender uses. Your lender may either use a different type of FICO score, or they may have some other kind of credit scoring calculation system.

Should You Track Each and Every Score?

By federal law you can view your credit reports for free, once each year. If you want to take a peek more often than that, you’ll have to pay about $15 per report at each of the credit reporting agencies. FICO also advertises on its website that you can view previous base FICO score versions, versions specific to the auto lending industry, as well as bankcard-specific versions. With the 3-Bureau Credit Report & FICO Scores, you can pay $59.85, which  gets you your FICO 8 Score from each of the 3 credit bureaus; one 3-bureau credit report; a FICO® Score Simulator; and access to 19 of the most widely used FICO Score versions.

If you plan to buy a car, of course, then knowing your auto-specific FICO score may provide you with key information about your chances of approval for your car loan. Similarly, you may want a mortgage industry credit score to watch as you plan to buy a new home. For most Americans, the important score to keep an eye on is still the “standard” FICO credit score. Likewise, most consumers should also take advantage of the chance to see and review their credit files, free of charge, once each year. Beyond that, it may not make a significant difference in your financial life to stay abreast of all these scores that are calculated in different ways.

What You Should Do

Trying to figure out where you stand based on as many as 19 different interpretations may be a bit overwhelming. Some people who hear about these different FICO scores are going to panic, afraid that their credit will suffer. But there really should be no cause for alarm and for most people, there is no reason to re-evaluate your approach to maintaining a good credit rating. Regardless of what kind of credit you need and who your lender happens to be, what matters the most is financial strength, stability, your ability to repay loans on time, and manage your debt.

You should monitor your credit files and report any errors you find. Always pay your bills on time, maintain a low credit utilization ratio, and if you plan to borrow a significant amount of money, you should pay off your credit cards before applying for a line of credit.

If you pay attention to those fundamentals, your credit score should reflect that you're a low-risk borrower. When applying for credit, it won't hurt to ask the lender what kind of score is required and what kind of score they use.

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