Different Types of Credit Scores

Since the credit bureaus use similar predictive scoring systems to figure out your credit risk, if you have a high score with one bureau, you may have a high score across the board. Still, scores can vary by several points because bureaus use multiple credit score versions, further distilled into two main categories: base scores and industry-specific scores.² Lenders decide which credit score version they’ll use when evaluating your credit risk.³

Base credit scores help predict the likelihood that you will or won’t pay your agreed upon credit obligation, whether it's a mortgage, credit card, or student loan.¹ Base scores come in many historical versions, and lenders generally may not always upgrade to the most recent⁴ – meaning a lender might still use FICO Score 8, not the newer FICO Score 10. Industry-specific scores are optimized for lenders that may be asking for your credit score to assess risk on specific types of credit obligation, like car loans and mortgages, and insurance companies.^4,1

While base credit scores and industry-specific credit scores use the same scoring models, their algorithms can be adjusted to give lenders more targeted risk assessments. There are many different FICO scoring models that can be used by lenders.⁴ Your score may vary depending on how the lender requests it. In other words, you may have a different FICO score for a car dealer than for a bank, even if both are considering your car loan.⁵

Your credit reports are typically updated as the credit bureaus receive information from your creditors, so they might, for example, change the moment you pay your credit card bill – since payment history and credit utilization ratio are factored into your creditworthiness.⁶ However, credit scores aren’t necessarily pulled at the same time, so your credit files across the three bureaus may have different information at a particular moment – some of which may no longer be up-to-date.⁷

So, even if all three credit bureaus use the same credit scoring model, inconsistencies could still occur among the credit scores due to variations in the data.⁸ That’s why lenders and creditors looking to evaluate your risk and understand your past financial affairs may request scores from all three bureaus, and then use the middle score when making decisions about your credit or loans.⁴

Most lenders, credit card companies, and other financial institutions submit financial data in monthly reports to the three bureaus, but they don’t always share the same information. Just as timing can fluctuate, so can the sources of information for different types of credit reports, and that, too, can affect variations in credit scores.³ For instance, an account in collection may appear on one credit report but not another. Such negative information – accounts in collections, foreclosures, and bankruptcies – are considered part of your payment history and may adversely affect credit scores.⁹

If you’re dealing with a smaller bank, they might apply a “judgmental” credit scoring model to gauge your creditworthiness. Unlike FICO’s statistical models that automatically correlate and assign weights to data factors, judgmental models rely on the lender’s expertise to assess credit risk, usually by someone manually scoring many of the same criteria used by statistical models.¹⁰

Statistical credit scoring models are better suited to help lenders make quick, accurate, and impartial decisions in minutes or days for just about everything from mortgage applications to extending credit limits on credit cards.