Have you ever compared different credit reports? Depending on the date that you request and receive a report, your credit score could be different between various reports from different credit bureaus.
Did you know that there are many more different credit scores than what you can receive through a free credit report from Equifax, TransUnion, or Experian? If we just made things more confusing for you, don't worry! Credit Diva of Dallas is an expert at reviewing and understanding different credit scores, as well as what to look for when you ask, 'What should I look for when I check my credit score?'
Lenders use different credit scores to evaluate your creditworthiness for different things. Before you get bogged down in too many scores, here's what you need about the most important scores—and how they impact your credit in Dallas, TX.
- Many lenders use FICO scores to evaluate your credit risk.
- FICO has been the go-to standard for credit scoring since the early 1990s when the three major credit bureaus received the credit reporting formula.
- When monitoring your credit score today, you can find your FICO score on reports from all three major credit bureaus.
The FICO formula has evolved over time to provide the most relevant and current methods of evaluating consumer credit. Each new formula update receives a number designation—like FICO 10—even though FICO 8 remains one of the most commonly used formulas by many lenders. However, different types of lenders apply different FICO versions to most accurately determine your eligibility for a line of credit.
The FICO 8 formula calculates your score based on a combination of factors, including:
- Credit Mix (10%)
- On-time Payment History (35%)
- Amount Owed (30%)
- Length of Credit History (15%)
- New Credit (10%).
Credit reporting agencies use these factors and a FICO formula to determine your FICO score. With such importance placed on this formula, it's critical to regularly monitor your FICO score when you ask, 'Where should I check my credit score?'
If you're not looking at a FICO score, a credit reporting bureau is probably showing you the other main credit score number: VantageScore.
The most commonly used version of this formula is VantageScore 3.0, but it weighs various financial behaviors differently from FICO to determine your score. The VantageScore 3.0 formula includes:
- Available Credit (3%)
- On-time Payment History (40%)
- Age and Type of Credit (21%)
- Credit Utilization (20%)
- Balances (11%)
- Recent Credit (5%).
Both your FICO and VantageScore numbers are worth monitoring to maintain an accurate picture of your credit history and scoring. In most cases, checking your credit is free from multiple sources. However, some reports for specific scores can require a fee.
How Do Lenders Use Credit Scores?
In most cases, Dallas, TX lenders use a combination of scores to get a complete picture of your credit situation. When applying for loans or credit, critical credit scores include:
- General lines of credit: FICO 8 and 9, VantageScore 3.0
- Car loans: FICO Auto Scores 2, 4, 5, 8
- Mortgages: FICO 2, 4, and 5
- Credit cards: FICO Bankcard Scores 2, 3, 4, 5, 8.
Before you become overwhelmed at the thought of improving all of these scores, the right credit repair company in Dallas, TX, can boost your overall credit picture.
Credit Repair Helps All Scores
Better credit habits improve all of your credit scores. Since FICO and VantageScore formulas evaluate your consumer behavior, improving your practices will positively impact each formula and score!
- Credit Diva of Dallas can help you evaluate your credit report and understand different credit scores.
- We help people suffering from bad credit to put a plan in place for credit repair in Dallas, TX.
- We also provide coaching to maintain good habits long-term.
If you need credit help, now is the time to reach out to us! Contact us to learn more about how to fix your credit.