Do All 3 of Your Credit Scores Matter?
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The title of this article actually features a big mistake. The mistake is the idea that you only have 3 credit scores and it is one of those credit myths which resurfaces over and over again. In truth while you do only have 3 credit reports, one from each of the 3 major credit reporting agencies (Equifax, TransUnion, and Experian), you really have hundreds of different credit scores.
Your Many, Many Credit Scores
Credit scores come in a wide variety of shapes and sizes. There are different brands of credit scores (i.e. FICO and VantageScore), different varieties of credit scores (i.e. mortgage industry adjusted scores, auto industry adjusted scores, credit-based insurance scores, general scores, etc.), and even different versions of credit scores (i.e. FICO Scores versions 1-9). While one lender might check your FICO 8 auto industry adjusted credit scores the next lender might be viewing an entirely different scoring model altogether. The result? You are unlikely to receive the exact same number twice when your credit scores are pulled by multiple lenders or even when you check your credit on your own.
The 3 Score Myth
Because you do indeed have 3 credit reports when a lender, such as a mortgage lender, checks all of 3 your reports he or she will also likely be viewing a snapshot of 3 of your credit scores at that time, one from each credit bureau. This leads many people to incorrectly assume that they only have three credit scores. However, as we have already covered above, you actually have a very wide variety of credit scores at any given time. It all depends upon who is checking your credit.
Strike a Pose
Another popular credit scoring myth is the idea that your credit scores are always in flux, automatically changing whenever the information on one of your credit reports is updated. Yet credit scores are actually only generated at the moment whenever you or a lender request them. Credit scores (designed to help lenders predict the level of risk associated with doing business with you) are just a snapshot of your credit worthiness at that exact point in time.
When you apply for a loan your lender will not be concerned with your mountain of available credit scores. Instead, your lender will only be concerned with the specific snapshot of credit scores which he or she pulls for you.
Do Lenders Check Credit Scores from All 3 Credit Bureaus?
Yes, some lenders indeed will want to see a copy of all 3 of your credit reports and a snapshot of all 3 of your credit scores generated by the credit scoring model of their choice. Most notably mortgage lenders will rely upon all 3 of your credit reports and scores to use when evaluating your application for a new loan. For this reason it is important to keep all of your credit reports (and by extension your credit scores) in the best shape possible. You cannot control which credit scores a lender may use, but you can exercise a lot of control over the information which appears on your credit reports.
Many other lenders such as auto lenders, credit card issuers, and banks granting personal loans will only check 1 of your 3 credit reports and scores whenever you apply for new financing. The catch, however, is that you probably will not know ahead of time (unless you ask) which credit report and score they will be checking. If you want to be sure that you receive access to the most attractive financing terms possible regardless of what you may be applying to receive you need to make earning and maintaining great credit across the board a priority. Otherwise you could find yourself wasting money on higher rates and fees or even being denied outright for financing.
Frequently Asked Questions
Do lenders consider all three credit scores when making a decision?
Should I pull all 3 credit reports?
Which credit score is the most important out of the three?
While there is no definitive answer to which credit score is the most important, lenders have a clear favorite: FICO Scores are considered in over 90% of lending decisions.
While this can help you narrow down which credit score to check, you must still consider why you’re checking your credit in the first place.
Are 3 credit scores different?
This indicates that a credit bureau may be missing information that can help or damage your credit score.
The scores are from various dates. Because your credit ratings might alter at any time, it’s crucial to compare credit scores from the same time period.
Which of the three credit scores is usually lowest?
This range’s lowest credit score is 300. However, in fact, nearly no one has a score that low.
A credit score of less than 580 is often considered “poor credit.” In the United States, the average FICO Score is 704.