Why Do I Have Different Credit Scores?

Reading time: 3 minutes

Highlights:

• You don’t have just one credit score
• Your credit scores are calculated based on information in your credit reports
• There are many different ways of calculating credit scores, or scoring models

Your credit scores can play a significant role in your financial life, but understanding those three-digit numbers can be confusing. 

You don’t have just one credit score; there are many different credit scores provided by different companies, and many different scoring models, or ways of calculating credit scores. It’s also normal for credit scores to fluctuate. 

It’s important to understand credit scores and how they are calculated, especially if you intend to apply for credit, such as a mortgage or a vehicle loan, in the future. 

What is a credit score? 

Your credit scores, displayed as a number generally ranging between 300 and 900, serve as an estimation of how likely you are to pay your bills on time. They are based on your credit account history as reported by lenders to one or both of the two nationwide credit bureaus – Equifax and TransUnion – and reflected in your credit reports. Higher credit scores generally indicate that you have responsibly managed credit accounts in the past, meaning lenders and creditors may view you as a lower-risk borrower. 

Why might credit scores differ? 

There are several reasons why credit scores may differ. These include: 

Differences between credit bureaus: As mentioned, not every lender and creditor reports to both credit bureaus – they may report to only one, or none at all. In addition, lenders and creditors may report to the credit bureau or bureaus at different times, meaning one credit score may reflect the most recent information, while another may not. 

Differences in credit scoring models: While all credit score models have the same purpose (to predict the likelihood of timely bill payment), there are some differences in the calculations. In general, factors that affect credit scores include your payment history, the amount of your available credit you’re using, public records such as bankruptcies, and the length of your credit history. But different credit scoring models may assign varying weight to these factors and, depending on the model used, the scores may differ. 

Types of data included in credit scoring calculations: The credit lending community uses different credit scoring models for different purposes. Each score is built using slightly different factors, depending on its intended use. Some credit score models may incorporate mortgage and/or mobile phone payment information in the calculation, for instance, while others may not. 

While credit scores are important, they are only one of several pieces of information an organization will generally use to evaluate your creditworthiness. For example, a mortgage lender would likely want to know your income as well as other information in addition to your credit score before it makes a decision.

It may also be a good idea to check your credit reports regularly – you’ll want to ensure all the information is accurate and complete. If you see something on your credit reports you believe is inaccurate or incomplete, or you see information you don't recognize that could indicate potential fraud, you can contact the lender directly or file a dispute with the credit bureau that provided the report so it can be investigated.