Maintaining a good credit score is important to your financial health. Your credit score is calculated based on the data in your credit report. Your FICO score is the go to source companies rely on to check your credit worthiness for the approval of financing important major purchases such as house and vehicle loans and even credit cards .  

Having a good credit score is pivotal, but in recent years has also led to a lot of confusion over the various credit bureaus and how they report your score. In fact, most people do not even realize that there is not one, but three credit scores for each person that are reported in the U.S. These three credit scores, most commonly known as FICO (Fair Isaac and Company) scores, are used to determine your credit risk .  

Although the FICO score is the score banks use most often, it should be known that most lenders will look at multiple credit scores to assess your credit. This is true for several reasons :

The three credit scores are reported from three different credit bureaus : Experian, Trans Union and Equifax. Each of these bureaus may have access to slightly different information about you and each uses it’s own variation of a score calculation . All of the bureaus calculate scores based on guidelines from the Fair Isaac Corporation so they are all FICO scores. These three credit scores are the biggest factors determining what you will pay for a loan. Obviously those with a higher FICO score will qualify for better interest rates on loans and credit cards.

Banks will typically get FICO scores from more than one of these bureaus and, as mentioned, the scores can be different. Each agency configures your score using only the data that is in your file at their agency, therefore if your information differs at each agency, this will reflect a different score for each report. Consumers need to especially be aware of these three credit scores when purchasing their score from 3rd party sites, as they may not be receiving any of these three credit scores.

Scores from Equifax, Trans Union and Experian are not the only scores used to determine credit risk.   Some banks may choose to use their own credit scores , which often include the FICO score and other information about you. Also as new information is added to your credit report on a regular basis, your score updates to incorporate this information, so a report that you received just 3 months ago may have already changed.