You Have 30 Or More Official Credit Scores

When you should pay for them, and when free is good enough.

Most people think they have just one credit score, and that all lenders use this single score to measure your creditworthiness. But not only do you have over 30 credit scores, a quick web search will also reveal seemingly endless ways to obtain them — all offered to you with costs ranging from free to $60.

How do you know which scores matter, when to pay, and when free is fine? Let’s break it down in the first of our two-part article — starting with the paid services.

credit scores
Different credit score variations for the same person from one Score 3B Report.

First, some background: Each of the three major credit bureaus — Experian, Equifax and TransUnion — collects information about you from financial institutions and public records that they use to compute your credit score. These three bureaus generally use a standardized credit scoring system created by the Fair Isaac Corporation (FICO), which is why the scores provided by these bureaus are referred to as “FICO scores.”

Just as Apple regularly releases new versions of the iPhone, FICO also releases newer, more accurate versions of how it calculates your base score. The newest base score model is called the FICO 9, but prior versions of it — FICO 8 and FICO 5 — are still in use, and your base score may be different in each model.

What is less well-known is that each bureau also creates multiple versions of their credit score. In the same way that Apple created the iPad to meet different needs than the iPhone, FICO has also created industry-specific credit scores, like the FICO Auto Score and the FICO Bankcard Score. Each scoring version is calculated differently by modifying how certain parts of your credit history are weighted. You may have 30 or more different versions of your credit score from the three major bureaus alone!

Why does this matter to you?

In my work in credit repair, I see a lot of credit reports. On reports pulled the same day, I’ve seen credit scores vary by as much as 100 points across various scoring models. Before applying for a loan, many consumers pull a quick, free credit report online. Only when they are turned down for that special zero-percent financing rate or a mortgage do they learn that their lender was using an entirely different model — one that showed their score as 100 points lower.

It’s not that the higher score they saw was necessarily wrong — it’s just that a different algorithm was used in calculating that score. A potential lender may look at one score or three, and they may pull from different models for the same loan. The only score that matters is the one your lender is using. Put yourself in the best negotiating position possible by researching your various credit scores ahead of time, and understand which model your lender is most likely to use.

Big Loans

If you’re applying for a big loan — like a mortgage, car loan, or business loan — I recommend and spending $59.85 to buy their Score 3B Report. This is especially important if you’ve had credit problems in the past, have been through a divorce, have a common name, or have had any kind of financial trauma.

With the Score 3B Report, you’ll get your base FICO 8 and FICO 9 credit scores from each of the three credit reporting bureaus, as well as the industry-specific score versions used by auto and bankcard lenders. Mortgage lenders generally use the Experian FICO 2 scoring model, the TransUnion FICO 4 and the Equifax FICO 5 to create a score called the "tri-merge", which you’ll also see on your Score 3B report.

Another good thing about pulling your own scores ahead of time is that you can address errors and surprises. The last thing you want is to be close to signing contracts on a house and have something unexpected surface that could jeopardize your loan.

Credit Repair

Although MyFico offers a subscription service for $29.95/month, I do not recommend it. While the subscription allows you to see any score changes in real time, you can’t see what changed on the report itself more than every 90 days. To me, the cost isn’t worth it.

When clients work with me for credit repair and need to see their credit reports regularly, I guide them toward PrivacyGuard. The scores provided are generally within five to 10 points of the FICO 8 scores. They charge a monthly $19.99 fee following a 14-day trial (one dollar cost), and the subscription covers all three credit bureaus. You’ll also receive alerts for anything new that pops up on your credit report, including address changes and new applications for credit. If you’re not receiving free FICO scores elsewhere, this is the best option to keep an eye on things, and to see if your credit is improving.

Up next: You Have 30 Or More Official Credit Scores: Part 2, where we dive into the additional options available for receiving your credit score at no cost.

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