You Have More Than One Credit Score!
The first thing you need to realize about your credit score is that there is more than one credit score in your life! You probably have many credit scores each of them from a different lender or information collector and each calculated for a different purpose. Indeed there are more than 100 credit scoring models that are currently in circulation and used by lenders and insurance companies.
However the best-known model is the FICO scoring model (Fair Isaacs Risk Model.) It is the most used as it is used by the big three credit bureaus. If you live in America chances are you have at least three credit reports – one each form Equifax, Experian and TransAmerica. All three use FICO scores to tell others about your likelihood of defaulting on a loan or paying your loans late.
The good news is that all three of these major credit bureaus use scores based on the FICO system so they are somewhat in sync with ach other most of the time. The bad news is that the score may be different in each depending on what information one particular credit bureau may happen to have on you. Unfortunately the three bureaus operate independently and do not update each other’s report.
Also it is not uncommon for one credit bureau to be missing information that another credit bureau has or have mistakes that another credit bureau doesn’t. This can cause your score to vary from report to report by hundreds of points although with most people the difference in points among the three is usually about than thirty. Still a thirty point drop in a score is enough to get you denied a loan.
The reason that you want to try and make sure that all of the information on all three of your major credit reports is about the same is because you never know which company a lender is going to choose to pull a credit report from. Also if you are having a problem getting a loan or credit you can also produce the better credit report, which can help the lender see that the one with the lower scores is missing information or that it has errors.
Unfortunately no matter how good your credit score is, you can’t really rest on your laurels when it comes to maintaining it. It is a good idea to periodically monitor all three of the credit reports to make sure that they are free of mistakes and contradictions. The more uniform they are and in sync with each other in terms of their credit history content, the more better off you will be