Whats the difference between fico score and credit score

Q: Do lenders use FICO score or credit score?

FICO ® Scores are the most widely used credit scores—90% of top lenders use FICO ® Scores. Every year, lenders access billions of FICO ® Scores to help them understand peoples credit risk and make better–informed lending decisions.

A credit score is a three-digit number that lenders use to determine whether you’ll get approved for financial products like credit cards and loans.

Table of Contents Show

6 reasons why your credit score differs
Which credit score matters the most?
What's the difference between FICO� Scores and non-FICO credit scores?
Why do FICO Scores matter?
Top 3 reasons you should choose FICO Scores over non-FICO credit scores
FICO Scores vs. other scores: Compare for yourself
If it doesn't say FICO Score, it's probably not a FICO Score
Which is better FICO or credit score?
Why is my FICO score different than my credit score?
Do lenders use FICO score or credit score?
What is a good FICO score?

Credit scores typically range from 300 to 850, but there are dozens of versions — from base scores to industry-specific scores — that make it tricky to know which one you're being evaluated on during the application process.

You may check your score with your credit card company or on a personal finance site only to find it differs on another, making it hard to know what credit score range you fall in and which products you have the best chance of qualifying for. And when a lender pulls your credit score, they may request it from a different credit bureau — Experian, Equifax or TransUnion — and/or request a specific version that varies from the one you checked.

Most credit scores weigh the same factors, such as payment history, utilization rate, length of credit history, number of new inquiries and variety of credit products. However, there may be score differences for a variety of reasons, which CNBC Select breaks down below.

6 reasons why your credit score differs

Credit scoring model used: There are several models out there for scoring your credit history. But typically, lenders use one of the two main credit scoring models — FICO or VantageScore. Both companies evaluate the same main factors of your credit history like payment history and utilization rate, but use their own formulas to weigh each factor.
Score version: There are dozens of credit score versions that are broken up into base scores and industry-specific scores. Base scores, such as FICO® Score 8 or VantageScore 3.0, show lenders the likelihood you’ll repay any credit obligation. Industry-specific scores represent the odds you’ll repay a specific loan, such as the FICO® Auto Score 9 used in auto loan decisions.
Credit bureau: Credit scores are calculated using data listed on your credit report, which comes from one of the three major credit bureaus — Experian, Equifax or TransUnion. Your score differs based on the information provided to each bureau, explained more next.
Information provided to the credit bureaus: The credit bureaus may not receive all of the same information about your credit accounts. Surprisingly, lenders aren’t required to report to all or any of the three bureaus. While most do, there's no guarantee that the information will be the same across the board, creating potential differences in your scores.
Date scores are accessed: If you view your credit score at different times, there may be discrepancies since one score may be outdated.
Errors on your credit report: Your credit score can reflect any errors that appear on your credit report. If errors only appear on one bureau's report, then your credit score from that report may differ from another that has no errors. You should dispute errors on your credit report right away to avoid harm to your credit score.

Which credit score matters the most?

While there's no exact answer to which credit score matters most, lenders have a clear favorite: FICO® Scores are used in over 90% of lending decisions.

While that can help you narrow down which credit score to check, you'll still have to consider the reason why you're checking your credit score. If you're accessing your credit score simply to track your finances, a widely-used base score like FICO® Score 8 works. This version is also helpful for gauging which credit cards you qualify for.

If you plan to make a specific purchase, you may want to review an industry-specific credit score.FICO lists the specific scores that are used for various financial products. FICO® Auto Scores are ideal if you want to finance a car with an auto loan, while it's good to check FICO® Scores 2, 5 and 4 if you plan to buy a house.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

What's the difference between FICO� Scores and non-FICO credit scores?

Not all credit scores are FICO Scores. For over 25 years, FICO Scores have been the industry standard for determining a person's credit risk. Today, more than 90% of top lenders use FICO Scores to make faster, fairer, and more accurate lending decisions. Other credit scores can be very different from FICO Scores—sometimes by as much as 100 points!

What's in a name? When it comes to FICO Scores versus other credit scores, the answer is "quite a lot."

FICO Scores are used by 90% of top lenders to make decisions about credit approvals, terms, and interest rates. Chances are when you apply for a mortgage, an auto loan, credit card, or a new line of credit, the bank or lender is looking at your FICO Score.

The reason? Lenders know what they are getting when they review a FICO Score. FICO Scores are trusted to be a fair and reliable measure of whether a person will pay back their loan on time. By consistently using FICO Scores, lenders take on less risk, and you get faster and fairer access to the credit you need and can manage.

FICO Scores use unique algorithms to calculate your credit risk based on the information contained in your credit reports. While many other companies design their credit scores to look like a FICO Score, the mathematical formulas they use can vary greatly.

Unfortunately, the methods used by these other companies can lead to credit scores that are very different from your FICO Score. And even just a few points difference can have significant consequences on your terms and rates?potentially costing you hundreds or even thousands of dollars. Learn how FICO Scores are calculated.

Why do FICO Scores matter?

Imagine a world where every lender used a completely different method to decide whether or not to give you a loan. You would have no way of knowing whether you would be approved at one place and denied at another.

This was actually the case not that long ago. There were all kinds of different ways that lenders would make decisions about extending credit (including data about a person's address, type of employment, and gender, among other things.). People were often approved or denied based on inconsistent and sometimes unfair information.

In 1989, FICO Scores were created as a way to help streamline the decision-making process for lenders and make the lending process more consistent and fairer for people like you. Read more about the history of FICO Scores.

Top 3 reasons you should choose FICO Scores over non-FICO credit scores

"For years, there has been a lot of confusion among consumers over which credit scores matter. While there are many types of credit scores, FICO Scores matter the most because the majority of lenders use these scores to decide whether to approve loan applicants and at what interest rates."
? The Wall Street Journal1

So why choose FICO Scores over other scores? Here are just a few reasons:

You can be confident you're seeing a score many lenders actually use. Because FICO Scores are the most widely used scores, it is very likely the lender will check your FICO Scores when you apply for credit.

2.You can make more informed financial decisions. With FICO Scores, you're better prepared to know when to apply for credit because you're viewing the scores used by 90% of the top lenders.

Remember, non-FICO credit scores can differ by as much as 100 points. Other credit scores may vary from your FICO Score by several points. This variance could cause you to overestimate your likelihood of getting approved. According to a recent Consumers Union report, "score discrepancies can give consumers the false hope that they qualify for credit or low-interest rates when they do not. Consumers can face higher interest rates than expected, or be denied credit."2

On the flip side, non-FICO credit scores can lead you to underestimate your creditworthiness, keeping you from purchasing a much-needed family car or refinancing a mortgage that could save you thousands in interest.

You get 25+ years of experience and a score that evolves to meet your needs. The way we use credit has changed a lot since the first FICO Score. For example, today, we use credit cards more frequently and loans are larger to accommodate rising costs.

As spending behaviors have changed, FICO Scores have evolved. For instance, FICO Scores continue to accurately predict credit risk so you can get access to the credit you need and get credit that you can manage. By choosing FICO Scores, you're getting decades of industry-leading knowledge and expertise that lenders value and trust.

FICO Scores vs. other scores: Compare for yourself

FICO Scores	Other Credit Scores
The standard for over 25 years, used in over 90% of lending decisions	Often called "educational" scores
Makes lending decisions consistent, fast, and fair	Can be significantly different than your FICO Scores
Gives you a better understanding of your credit and more confidence when you apply	Can be off by up to 100 points —causing you to under or overestimate your creditworthiness

If it doesn't say FICO Score, it's probably not a FICO Score

"62% of consumers who received a non-FICO credit score mistakenly believed they received a FICO� Score."
? BAV Consulting Survey3

There's simply no substitute for FICO Scores. Remember, before the creation of FICO Scores there was no industry-standard to make sure access to credit was more fair and accurate. When you want to know where your credit stands, it just makes sense to get the scores your lenders will use.

A note of caution: some sites may try to sell a credit score and pass it off as a FICO Score. If it doesn't clearly say FICO Score, it's probably not a FICO Score.

Check here to know where you can get your FICO Scores.

The Wall Street Journal. (Aug 2015). American Express Unveils FICO Scores for Cardholders.
Consumers Union. (April 2014). ERRORS & GOTCHAS: How Credit Report Errors and Unreliable Credit Scores Hurt Consumers, 24.

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Which is better FICO or credit score?

"For years, there has been a lot of confusion among consumers over which credit scores matter. While there are many types of credit scores, FICO Scores matter the most because the majority of lenders use these scores to decide whether to approve loan applicants and at what interest rates."

Why is my FICO score different than my credit score?

Lenders report credit information to the credit bureaus at different times, often resulting in one agency having more up-to-date information than another. The credit bureaus may record, display or store the same information in different ways.

Do lenders use FICO score or credit score?

FICO ^® Scores are the most widely used credit scores—90% of top lenders use FICO ^® Scores. Every year, lenders access billions of FICO ^® Scores to help them understand people's credit risk and make better–informed lending decisions.

What is a good FICO score?

Although ranges vary depending on the credit scoring model, generally credit scores from 580 to 669 are considered fair; 670 to 739 are considered good; 740 to 799 are considered very good; and 800 and up are considered excellent.