What Are The Types of Credit Scores And Which Ones Matter?

What Are The Types of Credit Scores And Which Ones Matter?

Its a common myth that there are only three types of credit score.  In reality, there are much more than that.  It is important to check which credit score is being monitored when applying for a loan, so you can improve your chances of getting a low interest rate.

What is The Most Important Credit Score?

The FICO score is considered to be the most important score.  It was the first made in the credit scoring industry, and has been around since the 1950s.  90% of creditors at any major bank will be using your FICO score to determine your credit if you are applying for a credit card, a mortgage, or a car loan.

The FICO score ranges from 300-850 the higher the better.  In 2011,  18.3% of Americans had FICO Scores of above 800.  This is due to many Americans paying bills on time, leaving no outstanding debt on their credit cards, and avoiding opening many new credit lines.  Knowing your FICO score ahead of time is the best way to get the best interest rate.

Can we obtain our FICO score online?

Although it may be the most important number Its actually very difficult getting your FICO score online.  There are only two real resources which you can use to find out your FICO scores:

  • myFICO.com – FICOs forefront website for consumers to check their credit score.
  • Equifax.com – A long leader in selling FICO scores to buyers.
Many companies do not want to pay licensing fees to FICO to offer their customers credit checking services.  Therefore, many have come up with their own proprietary credit scoring model which is similar to the FICO scfore.  There is no where else you can buy your FICO score.  But since it may be difficult to buy from these places, there are many similar imitations which work just as well.

Which are the three major credit bureaus to check my scores?

The three major credit bureaus include: TransUnion, Equifax, and Experian.  By obtaining a credit report from all three -you will see different information and you will know what you need to dispute.  Experian is one of the biggest one to go through.  You can obtain one free report per year from each organization.  There are more than over 1000 different credit scoring systems used today.

Why cant I compare the three credit scores I receive?

Each credit score received is different.  If you are applying for a simple credit card the credit score you have is not too important and checking an estimate of it is okay.  If you are applying for a real home its important to check what your real credit score is.

For example, for VantageScore, between 800 to 899 is good.  So if you got an 830, that score would be considered good.  If you are applying for a cash back credit card you may still get turned down.

How can I find out more information about my credit?

There are many other credit reports and agencies.  The following are helpful resources you can take a look at:

www.experian.com – to get copy of your credit report from Experian
www.tuc.com/ – (to get copy of your credit report from Trans Union)
www.equifax.com/ – (to get copy of your credit report from Equifax)
www.privacyrights.org – (about privacy of your credit information)
www.fairisaac.com – (credit score information)
www.zdnet.com – (click on PayEmOff for info on paying off debt)
www.cuna.org – (Credit Union National Association)
www.ftc.gov – (Fair Debt Collection Practices Act)

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