Why Do I Have So Many Credit Scores?

by Kailey Hagen | Updated July 21, 2021 - First published on Jan. 17, 2020

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Bespectacled young man looking at the numerous credit cards in his hand with confused disbelief.

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You have a lot of credit scores, and they're not all the same.

It's not difficult to get a free credit score these days. And if you check your score in a few different places, you might find that the numbers don't always match up. That doesn't necessarily mean that any of them are wrong. It probably means the scores are based on different credit reports or a different scoring model. 

The truth is, if you have a loan in your name or a credit card in your wallet, you have dozens of credit scores and one isn't necessarily more correct than another. Here's a closer look at what credit scores are and why you have so many of them.

What is a credit score?

A credit score is a three-digit number that's essentially a financial grade. It's based on the information in your credit reports. These contain details of current and past credit accounts in your name, including payment history, balances, and information from public records. Everyone has three credit reports, one for each credit bureau -- Equifax, Experian, and TransUnion -- so you effectively have three credit scores for every scoring model, one corresponding to each report.

There are several credit scoring models in existence because each one weighs the factors in your credit report a little differently. The goal of credit scores is to help lenders more accurately predict how a person will handle borrowed money. Lenders want to protect themselves from losing money to borrowers who go bankrupt. Credit scoring companies constantly analyze data from millions of borrowers. If they spot new data that could help them predict risk more accurately, they might create a new credit scoring model that incorporates this information to give them better results.

FICO® Scores and VantageScores

The two most commonly used scoring models are:

FICO® Score

VantageScore.

If you're going to look up your credit score, you should check one of these since lenders are most likely to look at them when checking your credit. Both FICO and VantageScores have a few different versions, but they all use the same scoring system of 300 to 850, with a higher score being better. 

They look at pretty much the same factors, though VantageScore gives a stronger weight to payment history while FICO cares more about your credit utilization ratio -- the ratio between the amount you charge to your credit cards each month and the credit you have available to you. Other factors that both scoring models consider include the average age of your credit accounts, which types of credit you have on your account (credit cards, mortgages, etc.), and how often you apply for new credit.

There might be a slight variance between what you see and what lenders see. This depends on which version of the scoring model your lender is using and which credit report the score is associated with. Your credit reports all have largely similar information, but some financial institutions may only report payments to one or two of the credit bureaus instead of all three, resulting in slightly different scores even when using the same version of the same scoring model.

Other credit scoring models

Unless a company specifies that the score it's providing you with is a FICO or VantageScore, it's probably neither. Some companies develop their own educational scores using proprietary scoring methods. These may have different scoring ranges, too, so while a 600 might not be a great FICO or VantageScore, it could be a good score in a different model. 

These educational scores aren't used by lenders, so they're not that useful if you're trying to estimate your odds of success when applying for a new loan or credit card. But they can still provide valuable information on steps you can take to improve your credit. These educational scores may come with insights on how you can improve your credit score, like making efforts to pay all your bills on time in the future. Following those tips can help improve all of your credit scores.

How to raise your credit score

You'll never know exactly which version of which credit scoring model your lender is going to look at, so you must take steps to raise all of your scores if you want the best odds of success. This sounds intimidating, but it's really not that bad when you know that all scores consider the same basic factors.

Payment history is always the most important element, so paying your bills on time is critical. Set up automatic payments or reminders for yourself if you tend to forget. Your credit utilization ratio is the other major factor in your score. Try to limit yourself to 30% or less of your credit limit each month. A higher ratio indicates a heavy reliance on credit and suggests you may not be able to handle taking on more debt without falling behind on your payments.

Limit how often you apply for new credit and be careful about closing old credit accounts, as these are both things that can negatively affect your score. Applying for new credit generates a new hard inquiry on your report, which drops your score by a few points, while closing a credit account can hurt your credit utilization ratio by bringing down the total amount of credit you have access to. 

Time may seem like an enemy because negative marks on your credit report stick around for seven to 10 years, but it can also be your friend because a consistent, responsible payment history can help your score improve. Be patient and stay committed to demonstrating your financial responsibility and your score will rise over time, regardless of the credit scoring model. 

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