It happens all too often: you check your credit score online through a credit monitoring app or website and when you go to a lender, the score is different. Why is that?

Competition Drives Improvement

To start, credit scores are reported differently because there are multiple credit score models that compete against one another—which is a good thing! When credit score model developers compete, they strive for greater accuracy, drive inclusion, and become more consumer friendly. Even if they utilize the same information sources, models developed by different companies will vary significantly.

There used to be only one way to calculate a credit score. However, when VantageScore credit scores entered the scene with new scoring models focusing on innovation and inclusion, the industry shifted. Now, approximately 3,400 lenders and leading fintechs use VantageScore, including nine of the top 10 banks. VantageScore changed the game, helping financial institutions make more sound and inclusive lending decisions.

Credit File Updates

Most credit scores, including your VantageScore credit score, are determined by the data in your credit file. VantageScore does not maintain individual credit files, but rather uses the data to calculate a credit score. This data is updated frequently and individually by each of the three nationwide consumer reporting agencies (Equifax, Experian, and TransUnion—more on them, below), though depending on when your score was last “refreshed,” the scores can be different.

For example, the score you get from a credit monitoring app may have only been refreshed last month, whereas a lender might pull a score for an application that reflects more current information in your credit file. If data has been added to your file since the previous month, you’re likely to see a difference in score.

Different Bureaus

There are three nationwide consumer reporting companies, also known as credit bureaus. These three are Equifax, Experian, and TransUnion. Some lenders or data furnishers do not report to all three, meaning that the actual information residing in your files may vary. The credit score algorithms interpret the data from each bureau independently, which can cause scores to be different based on the bureau information they are generated from.

What Should I Do?

Competition has made credit scores much more inclusive, predictive, and easier to understand—no one wants to return to the days when a single credit score was used to judge each of us.

Here are a few tips to make the most out of getting your VantageScore credit score:

Expect variations: Remember that no matter what score you may get for free or pay for, the one that the lender is using could be different. It could be derived from a different model, be from a different credit bureau, or is a score that has been more recently updated.
Embrace the fact that free is good: Choose a no-cost credit score source, such as your VantageScore, as a directional indication of your creditworthiness.
Practice good habits: All models tend to view credit information similarly. So, missed payments and maxing out on credit card limits are reasons why scores decline across the board. On the other hand, scores are generally higher for those who show good habits, like paying on time and keeping balances low.
Stick to one: Stick to one score source and keep track of how that score trends and changes. Trying to monitor numerous scores can be confusing and time consuming.
Embrace the fact that free is good: Choose a no-cost credit score source, such as your VantageScore, as a directional indication of your creditworthiness.

For more information on how to obtain your VantageScore credit score for free, visit this page.