[I]f you have been turned down for credit or a loan because of a bad credit score, you know how important that number is. What you may not realize is that you don’t have just one credit score. You have dozens of scores, multiple ones from each credit reporting agency. And those numbers are hard to keep track of.
Why Multiple Numbers
Each of the three major credit reporting agencies – Equifax, Experian and Trans Union, has its own system for generating credit scores. Right there, you have three numbers. Furthermore, they have different algorithms based on why the creditor needs the information. You also have a FICO score, which is basically all three credit reporting agencies combined. FICO also has numerous credit scores, depending on whether a credit card company, mortgage broker or car lender is asking.
The Number You Get
In the past, you only saw the baseline FICO score if you joined the website as a subscriber. While it might give you a good idea of how you rate, it didn’t give you exact numbers that lenders and creditors would see. That is changing now.
The company is now going to offer more scores. Five will be from Equifax and five from Experian with Trans Union also being added in the future. These scores will be specific for different types of creditors and will give you a more accurate picture of your credit health.
Does It Matter?
You may be wondering if it really matters which score you get. After all, how far can one score vary from another? You might be surprised to find out that it can vary by quite a bit. Enough that you will be turned down for a loan that is stringent with credit score requirements.
A good example is when you want to buy a car. If your base score is 642 and the lender requires at least a 640, you may think you are sure to be approved. Instead, you are turned down because the score the lender looked at said 638. Just two points below can make a difference if the lender doesn’t make any allowances.
Having more credit scores available means more power for the consumer to manage his or her credit. Just make sure you compare the same scores from one month to the next to know exactly how you are doing.
