Lenders and credit card companies use both your credit score and report to determine how well you manage credit and how much risk they assume when they offer you a loan or credit card.
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Why Do I Have So Many Different Credit Scores?
If you’ve received your credit score from your credit card issuer, your bank or a credit reporting agency such as Experian, you’ve probably already noticed that your scores are different from day to day and place to place. There are many reasons why you have multiple credit scores, but for starters, here’s a short list of factors that can result in your having different scores in different places:
- Each of the three credit reporting bureaus maintains its own credit history on you. Because that data can vary, your scores from each bureau can vary as well.
- FICO® and VantageScore use different credit scoring models to calculate your score.
- Within FICO® and VantageScore, there are even more scoring models. For example, FICO® calculates separate scores for auto lending, mortgages and credit card applications.
- Banks and other lenders may use their own algorithms to calculate custom scores.
Rather than fixating on a single score or worrying about the differences between one score and another, you may find it helpful to think of yourself as having a range of credit scores. If you maintain good credit habits like paying all your bills on time every month, keeping credit card balances low and maintaining a good credit mix, a few points of fluctuation among scores will not matter: You’ll have solid credit scores across the board. The same holds true if you do not manage your credit accounts well: Your scores may vary slightly depending on where you get them, but they’ll reflect your overall credit management behavior.