How to handle Conflicting Credit Scores
When applying for a home or car loan, we are always instructed to check our credit scores first or “know before we go.” However when the score we receive online contradicts what the lender has on hand, it can make for a very confusing and frustrating experience. There are a few different reasons for conflicting credit scores and some positive steps you can take to ensure you have the most accurate and updated information about your score.
When obtaining your credit score online, it is important to make sure your credit score is directly from the Fair Isaac Company, otherwise known as FICO. This is the industry standard that most lenders use when determining credit worthiness. The majority of confusion stems from consumers obtaining non-FICO scores that reflect a potentially higher score than what the lender will see.
With the creation of the new Vantage Score, there has been great confusion as this score uses a scale of 501 to 990 instead of the traditional FICO scale of 300 to 850. The Vantage score was introduced by the three credit bureaus and as such, consumers view it as a credible source for obtaining their scores. According to representatives of Vantage score it is meant to be used as a tool to instruct individuals about their credit. However the fact that the score is purchased and is not a free online tool makes it misleading to buyers. Consumers looking to purchase a home do not want to be entertained by a meaningless score that they have to pay for.
The Vantage score was introduced as a way for the credit bureaus to regain the income that they now have to share with FICO. Ever since FICO made the decision to allow consumers to have access to their credit reports and scores, the bureaus have had to share some of the profit that was previously paid for by lenders alone. The credit bureaus are trying to see whether the auto industry as well as the credit card industry will accept the Vantage Score system as another industry standard in credit rating. For the foreseeable future, the mortgage companies will only be using the FICO credit rating to glean credit worthiness from applicants.
Although the actual FICO score itself isn’t for sale it is possible to buy the exact equivalent of the FICO scores from the three credit bureaus. It is listed on the Experian site as a PLUS score, on the Trans Union site simply as a credit score and it is listed on the Equifax site as a FICO score. Purchasing any of these reports can provide you with an accurate score which may be an exact match to what your potential lender will also be presented with. This will assist in avoiding any confusion from misleading reports that operate on a completely separate scoring scale from the traditional FICO industry standard.
