When people check their credit score, should it be by Credit Karma or on their Discover statement, etc., they look at the three-digit number. They take it as a fact that this is their credit score. Period. The same way they know their age and weight, they feel that now they know their credit score too.
But a credit score is not exactly like your weight, because your weight is a fact and it will not make a difference on which scale you weigh yourself. Your weight will stay the same (unless the scale is broken), but a credit score does not work this way. Your credit score will not be the same on the Credit Karma site as it will be on Credit Wise or on Myfico etc. So that brings us to the question of why are my credit scores different.
To answer this question let me first explain this:
The Difference Between a Credit Report and a Credit Score
There are three big credit bureaus that collect data on most American consumers which are: Experian, Transunion, and Equifax. These three companies collect the facts about your credit health and history, when you opened a tradeline, how much you spend on each credit card account, which type of loans you have, did or did you not pay your loans on time, etc.
Then there are other companies, the most common one being FICO, which take the facts from the credit bureaus. Then, based on these facts they calculate a score which is known as a fico credit score. Every credit score is made using two components. First, they use the facts which are collected by the credit bureaus. Second, a credit model takes the facts and calculates a score.
How Many Scoring Models Are Used?
Fico has four scoring model versions where each has a custom scoring model for each of the credit bureaus (don’t ask why) and each has different models for different types of loans and they are customized for different banks too, so this brings you to a total of over a hundred Fico scoring models. Of course, every scoring model will result in a different Fico score. Don’t forget that this is only Fico. There are also different companies. For example, Vantage Score (that’s the scoring model that Credit Karma uses), which currently has three scoring models (with a fourth which will be released shortly) which are also customized models. Basically, no one person has one credit score. Everyone has lots of them.
Facts Are Different
As mentioned above, there are three credit bureaus, each collecting their own data. Therefore, one credit report might not contain the same information as the other, either because it was not yet updated, or because of some mistake. (You should always review your reports and make sure this does not happen. This can easily be done on Credit Karma.)
After reading the explanation above, the answer as to why are my credit scores different is very simple. Number one is because if you pulled your credit for a credit card, then the Fico score used will not be the same Fico model used for mortgages, etc. Obviously, every credit model will result in a slightly different score. Also, it will all depend on which of the three credit reports were used and if the information doesn’t match, then the score won’t either. (This is beside the point that Fico customizes the same scoring model for each of the credit bureaus, for some odd reason).
Keeping Your Score Great With All Scoring Models
Even though every scoring model has unique ways of how they calculate a score, all scoring models will still predominantly look at the same factors which can be found here. As long as you keep these factors positive your score should be good no matter which scoring model is used.
I hope to be posting more about the different scoring models in future posts so stay tuned! You can subscribe to our newsletter here.