Credit Scores

CREDIT SCORES

Credit bureaus sell dozens of different credit scores; some are “educational,” designed for consumers, some generic, used by lenders, and still others are designed for mortgages or car loans. So even when you get a copy of your credit score, it may not be easy to figure out what you have received.

Fair Isaac

Fair Isaac created the FICO score, which ranges from 300 to 850. Borrowers qualify for the lowest interest rates if their score is ~750 or higher; scores below 620 likely mean getting a loan may be difficult. FICO is the most widely used credit score.

VantageScore

Experian, Equifax, and TransUnion, the three major credit bureaus, created the VantageScore that is used by some lenders. VantageScore has a range of 501 to 990, making it difficult to compare to a FICO score. VantageScore Solutions is about to release a new version based on the 300 to 850 range used by FICO.

Free Credit Reports

Even though free credit reports are available at AnnualCreditReport.com, selling credit scores and credit monitoring services is a big business. You should consider getting your credit score if you are thinking about financing a car or home during the next six-plus months. A six-month lead time will give you time to fix any errors in the report.

If you are going to pay for a report, Equifax and TransUnion FICO cost $20 each at myFICO.com. Experian FICO scores are not available to consumers. If you opt for a free option, CreditKarma.com offers a free TransUnion TransRisk score and VantageScore. CreditSesame.com provides a free Experian National Equivalency Score. In general, if one of these free credit reports ranks your score as “good,” your real FICO score is likely to be good.