Understanding Credit Scores

You are probably aware of your credit score and how important it is, but did you know that you don’t have just one? Surprise! The truth is, multiple credit scores paint the full picture of how strong your credit history is.

You’ll probably never know all your credit scores, but it’s a good idea to keep tabs on your credit scores from some of the major credit bureaus. Below are answers to questions you may have about understanding credit scores.

How Many Credit Bureaus are There?

Here’s the breakdown. There are three major credit bureaus in the United States:

• Equifax
• Experian
• TransUnion¹

Your credit reports from each of these credit bureaus may contain different information.² Lenders must have a paid subscription with a credit agency in order to be able to report to them and some of your lenders might not have subscriptions with all three credit bureaus. As you can imagine, this can cause discrepancies that affect your score.

How Many Credit Scoring Models are There?

There are also different credit scoring models used to assign you a credit score. Two of the most popular are:

• FICO Score
• VantageScore

While many lenders use these scores, these models have been updated over the years and some lenders use older models. ^4,5

Do All Credit Scoring Models Consider the Same Credit Score Factors?

While different scoring models may assign different weight to different criteria, all credit scoring models typically look at the same basic credit score factors to determine your credit standing.

What Affects Your Credit Score?

Some of the key credit score factors that credit scoring models take into account when assigning you a score include^9,10,11:

• Your payment history
• Whether you’ve declared bankruptcy or have been foreclosed on within the last ten years, had a vehicle repossessed or any legal judgements against you within the past seven years
• Whether you have ever had an account sent to collections
• The amount of credit you’re using relative to the credit available to you (also known as “credit utilization”)
• The average age of your credit accounts and how far back your credit history extends
• The mix of different kinds of credit available to you
• How much new credit you have recently applied for

Keeping your credit balances low, having a mix of different kinds of credit, not applying for too much credit at one time, and making payments on time should help you to earn a good credit score on most credit scoring models.

Do you need to keep track of all of your credit scores?

There’s little reason for you to try to keep track of every credit score you have, especially when lenders use their own proprietary scoring formulas. But, it’s a good idea to keep track of at least one or two of your scores.

The good news is you can get these credit scores for free from some credit card issuers and third party sites:

• Discover (regardless of whether you have a Discover card)
• Mint
• Credit Karma
• Credit Sesame

Staying aware of your credit scores helps you know whether or not you will be seen as an attractive borrower if you apply for financing. Landlords, potential employers, and insurance companies may also check your credit history, and your score can help them decide whether to rent to, hire, or do business with you.

If you are looking for an option to help manage your medical bills, consider financing through the CareCredit credit card. The CareCredit card is an easy way to pay for health and wellness care and offers promotional financing options.* To apply go to carecredit.com/apply.