The Different Types of Credit Scores & Why They Vary

Lenders use a number of different credit scoring programs to determine what kind of risk you are. The best-known credit scoring program is FICO (which was created by Fair Isaac). However, there really are multiple versions of FICO and each can yield a different credit score for the same person. In addition to FICO there is CreditXpert, programs created by individual lenders, and even scoring systems that have been created by the credit reporting agencies themselves.

All of these systems can be used to predict your creditworthiness and they all run off the same point basis. The scale generally runs from the mid-300s to the mid-800s. Your numbers may vary by up to 60 points from one scoring program to another but your score should remain in roughly the same range. 

Slight variations are caused by two factors -

• The Formula Used
  Each credit scoring program uses its own weighting system on primarily the same data that all companies use. In other words, one company may weigh late payments into the score more heavily than other companies might. In addition, some companies have specific formulas for the type of credit being sought. So, if you are applying for a mortgage, the credit score may be different than if you were applying for a car loan. This is, again, due to the amount of weight the scoring program gives various aspects of your credit record.
  

• Different Data
  There are three different credit bureaus that maintain credit records and each different credit bureau typically has different information in your records. This is often caused by the different information that the bureaus receive from creditors and the time frame in which they receive it. So, if your credit score was compiled based on your Equifax credit report it may vary considerably from a credit score compiled from your Experian credit report. For this reason, most lenders use the middle of the three bureau scores when making decisions, especially for mortgage lending.

If your credit scores vary more widely than 60 points, check your credit reports and make sure there are no errors. Often an error can occur in one of your reports, causing your credit scores to be completely different.