Which Credit Score Should I Pay Attention to?

There is no one credit score. There are many.

The one that matters the most is the credit score that a lender looks at when considering your loan or credit card application. So how do you make sense of all of the credit scores out there?

Most lenders use FICO scores or VantageScores when evaluating consumer credit applications. And among those, there are hundreds of custom scores for specific uses. All are based on payment history, debt usage, age of credit accounts, credit mix and credit inquiries — the basics of great credit. And all are designed to predict how likely consumers are to repay a loan. The three major credit reporting agencies have all developed scores as well, and sometimes they develop custom scores for particular clients. Each has its own method to predict which consumers are most — or least — likely to pay loans or credit cards as agreed.

The credit bureaus also make some scores available to consumers. These are often given to consumers for free, and they can be good tools for learning about credit and monitoring your credit.

Another thing to keep in mind when comparing your credit scores is that they may have different ranges. In other words, the highest score in one model may be 990, while in another it may be 850. That means a similar number using different models may mean something quite different.

Though that sounds overwhelming, keep in mind that the basics of all credit scores are the same and are based on key components found in your credit reports — you can get free copies of your credit reports once a year under federal law.

Because lenders won’t likely tell you the credit score they are using, it’s important to pay attention to the basics of good credit. If you are doing that, you should have a good score no matter which score the lender uses. Another advantage of monitoring your credit is that if there’s a large, unexplained drop in your score, you will know it right away. That could be a sign of identity theft or fraud, and the sooner you address either problem, the easier it will be to untangle.

You can check back each month for a new score and to monitor your progress as you build a positive credit record and credit score by paying your credit and loan accounts as agreed, keeping balances lows, not taking on too much debt.

So don’t be shocked if a free credit score that you receive on a credit card statement is different from the one you saw when you applied for a car loan last month. You can also get two free credit scores on Credit.com, updated every 14 days, along with details on how your credit stacks up based on the five credit basics.

All credit scores are based on information found in your credit reports. And that’s why it’s important to monitor your credit reports regularly and dispute any mistakes.

If there are accounts you don’t recognize, be sure to investigate. Your credit file could have been mixed with another consumer’s or, worse, a thief may be opening credit accounts in your name. Correcting errors on credit reports is especially important if you know you will soon be applying to finance a home or car, because your credit profile helps lenders decide which interest rate you qualify for — and having a good credit score can save you money. (You can see just how much you’ll spend on debt over a lifetime with this interactive tool.)