When an individual obtains a credit reports from one of the credit reporting agencies or from all three, they will see that there is quite a bit of information to digest. With more than one credit report, most of the information will be the same but there will also be some information that is different. The differences in some data from one credit reporting agency to another helps to explain why credit scores would be different from different credit reporting agencies.
Unfortunately, while the different pieces of information in different credit reports may explain why credit scores may be different from one credit reporting agency to another it doesn’t explain all the differences. In addition, when a consumer orders either an annual free credit report or simply orders a credit report from one of the big three credit reporting agencies, a credit score is not automatically given.
The Fair Credit Reporting Act requires the credit reporting agencies to supply consumers with free copies of their credit reports upon request once every 12 months but the credit reporting agencies are not required to supply the credit score. Because the credit score is not actually part of the credit report, this is a piece of information that credit reporting agencies can still charge extra for.
Now, once a consumer receives a credit score, it is important to determine if it is a score that the majority of creditors and lenders will actually use or if it is a proprietary score that is not often used by other businesses or banks.
There is one credit score that is currently used by the majority of creditors and mortgage lenders that is also available to consumers and that is the FICO score. In cases where the credit score given does not indicate that it is a FICO score the chances are its some other type of score that the lenders and creditors may not e using and is calculated using a different method than a FICO score.
Most of the mortgage companies, banks and credit card issuers rely on the FICO score created by the Fair Isaac Corp. as do insurers, retailers, telecommunications providers, healthcare organizations, and many government agencies.
The three credit reporting agencies also calculate their own credit scores, plus many lenders have their own algorithms for calculating credit scores that can be used. However, the FICO score is still the leading score used and paying for other scores may be valuable to see how an individual score currently stands but is not the best score to help determine if someone may qualify for a mortgage loan or other form of credit extension.
Credit scores are not given out free with the credit report. You have to pay a fee to get the scores. You can obtain your credit score by contacting any of the three credit reporting companies, similar to ordering your credit report. However, you may have to pay for this score.
Your score may be calculated using a number of different scoring systems from different credit reporting agencies. You will find websites that offer a free credit report and free credit score, but the score may only be free the first time or requires a monthly membership fee along with the possibility that it is a proprietary score not used in the lending business. Before enrolling in any service be sure to determine what the costs are and what the service or website will actually deliver.