Why Are There Three Different FICO Scores?
There are three different FICO scores because the three major credit bureaus, Equifax, Experian and TransUnion, all receive separate data that may be interpreted differently. Verify that credit data is correct with each credit bureau using advice from a certified public accountant and personal financial planner in this free video on credit scores.
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My name's Miranda Chook, a CPA. FICO scores and credit scores are used interchangeably, but FICO scores are technically a score that's calculated using the Fair Isaac Corporation's credit scoring model. The three major credit bureaus or credit agencies, Equifax, Experian, and TransUnion, also calculate your credit score, and that's why there are sometimes more than one credit score as far as the specific number, but generally you should fall within the same category which is good, very good, excellent, or poor. In general, they will all take information related to your payment history, the amount of credit that is available to you as a ratio to the amount of credit that you actually use, any new credit that you have been applying for, and a couple of other categories that may be a bit different among agencies. So, the important thing is to try and be in that very good or excellent category so that you can negotiate the best rates for yourself on mortgages or credit cards. One of the reasons why your credit score may be different is that each of the credit agencies has different credit information about you, and the reason for that is that the actual companies such as retailers or banks may only report to one or two agencies versus all three.