Are there Different FICO Scores? Now, let us dive deep into the following section to get the answer to this question.
FICO scores are familiar to most people who have applied for loans or credit cards. However, could you guess that you have more than one FICO score? Lenders can use several different FICO score models to assess your creditworthiness. In this blog post, we will be exploring the various FICO scores and what each of them means.
What is a FICO Score?
FICO score also known as beacon score is a three-digit number that reflects your credit records. Its credit score ranges from 300 to 850. Thus, credit risk is inversely related to the score with a good credit score relating to a lower level of credit risk. FICO scores are generated by Fair Isaac Corporation and apply to 90 percent of the top lenders in determining creditworthiness. People with high FICO scores are acceptable for credit and many times they can negotiate for better terms.
The Most Common FICO Scores
There are five different FICO score versions, but here are the three most commonly used by lenders:
1. FICO Score 8
The credit score version used most often is this one, FICO score 8. FICO 8 came into existence in the year 2009 and at present it is used by thousands of lenders including credit card companies, car loan providers, and mortgage companies. It ranges from 300-850. This score takes into account both good and bad data in your credit histories of the past two years.
2. FICO Auto Score 8
This score version was designed for auto lending decision-making including decisions on credit quantity. Frequent to the basic FICO Score 8 model but with a higher importance placed on auto loan payment history data. This score is however very important to most auto lenders. It also ranges from 300-850.
3. FICO Bankcard Score 8
The name also implies a common characteristic of this version of the FICO score, namely it takes into account such aspects that might determine credit card payment habits. All major credit card companies use FICO Bankcard Score 8 or FICO Bankcard Score 2 when considering issuing credit cards. It becomes possible to maintain the range within 300-850 all through.
Industry-Specific FICO Scores
In addition to those main three, there are also industry-specific FICO score versions used by mortgage lenders and others:
- FICO Mortgage Score 5 – Ranges from 300- 850 with mortgage payment history as a bigger factor.
Currently existing FICO Score 9: The newest broad FICO score version that factors in medical collection less intensely.
FICO Score 10 – It helps lenders give credit to more consumers by including telecommunications and utility payment histories.
It is made of the following; FICO Score 10 Suite – A type of score developed for auto finance, bankcard, and mortgage lending.
However, as you will see, it is sometimes difficult to determine which particular FICO score number or which model, the lender is using to analyze your application. At the very least, comparing can help translate back to you some of the effects that are at play when your scores are affected.
Why Do I Have So Many Scores?
You may be wondering why with all these FICO scores, why isn’t a single credit score? There are a few reasons why your score can vary:
• Depending on the scored models the number of factors influencing credit history differs
• Depending on what is reported by the three main credit reference agencies, Experian, Trans Union, and Equifax your scores can be quite different.
• It denotes that your scores vary with the dynamic credit position.
But it may seem irrelevant on the surface So multiple customized FICO scores help the lenders work out very fine customized loan decision according to their products. As for the main FICO 8 score, it is still better to monitor trends of the scores over time, although occasional differences may occur.
Checking Your Scores
Thinking of the FICO scores of those numbers? However, lenders can obtain access to your scores, you can also obtain your latest scores for free or for a token fee on many personal finance sites or from your credit card company. Keeping your scores consistent helps understand that some problems can be prevented from worsening before affecting your lending opportunities.
Comprehending different types of FICO scores makes you gain more consensus of the factors that are added to calculate credit rating that is very significant in our lives. Well now you know – yes it does seem like there is some N number of FICO scores, but in actuality, it comes down to just a few, but highly popular, versions of those scores which are used depending on the credit decision being made. This way, you will have all the necessary scores for monitoring your credit situation in the future if necessary.
Call on (888) 803-7889 to know more about your credit score now!
