You might think that your credit score is a consistent, cut-and-dry number. But if you’ve ever checked your score from different sources, you might have noticed that it doesn’t always match up exactly – or even come close sometimes.
Most Americans have a FICO score, plus scores from the three main credit bureaus – Experian, Equifax, and TransUnion – and each can look different from the others. Why? Because they’re calculated differently.
Let’s dive into what sets FICO scores apart from the three credit bureau scores and how each can impact your financial journey. We’ll also explain how working with the certified credit counselors on the CredEvolv platform can help you improve your FICO score, giving you a stronger foundation for reaching your financial goals.
What is a FICO Score?
First, let’s talk about FICO. The FICO score, developed by the Fair Isaac Corporation in 1989, is one of the most widely recognized and trusted credit scoring models. Financial institutions, including lenders and banks, frequently use FICO scores to assess the creditworthiness of borrowers. FICO scores are designed to predict the likelihood that someone will repay money they’ve borrowed and pay those bills on time.
Here’s how FICO calculates its score, which ranges from 300 to 850:
- Payment history (35%). This is your track record of on-time payments. Missing payments or having accounts sent to collections will hurt this percentage significantly.
- Amounts owed (30%). Also known as credit utilization, this is the ratio of your credit card balances to your credit limits. A lower ratio is generally better.
- Length of credit history (15%). The longer you’ve had credit accounts open, the better this factor will be.
- Credit mix (10%). This considers the types of credit accounts you have. The big 3 are credit cards, installment loans, and mortgages.
- New credit (10%). This monitors how often you apply for more credit, also called inquiries. Opening multiple credit accounts in a short period may hurt your score.
FICO scores are designed to predict the likelihood that someone will repay money they’ve borrowed and pay those bills on time.
Using these criteria, the FICO model aims to create a reliable, standardized measure of creditworthiness. Lenders tend to prefer FICO scores because they’re consistent across borrowers and have a reliable history of accurately predicting risk.
What are credit bureau scores?
Each of the three major credit bureaus – Experian, Equifax, and TransUnion – generates its own credit scores based on information they collect from creditors. The credit bureaus don’t always receive identical information from lenders. They each also use proprietary scoring models. As a result, they may calculate slightly different scores for the same individual.
These scores are similar to FICO but may weigh factors differently. For instance, some models used by the bureaus may put more emphasis on recent credit activity than others. Each credit bureau’s score can range from 300 to 850, like FICO scores, but you might notice slight differences due to variations in data and scoring algorithms.
Why are there so many different credit scores?
It’s normal to wonder why you have so many different credit scores. There are two main reasons for this:
- Different scoring models: FICO (and more recently, VantageScore) are considered to be the industry standards. But they’re not the only scoring models out there. Each credit bureau has its own version based on its proprietary scoring model, which could place different emphasis on certain factors like recent credit behavior or overall credit utilization.
- Differences in data: Credit bureaus don’t always have the same information. Lenders may report to one, two, or all three bureaus. For example, your credit card company may report your payment history to Experian and TransUnion but not Equifax, which would make your Equifax score different from the others. Additionally, if one bureau has slightly outdated information, your score there could temporarily reflect that difference.
Because of these factors, it’s normal to see slight variations in your scores across the bureaus. It’s also why many (if not most) lenders often prefer to look at the FICO score, as it serves as a standardized measure to reduce these inconsistencies.
Why should you focus on your FICO score?
Since FICO is the most widely used score by lenders, it’s often the best indicator of your borrowing potential. Most major lenders rely on FICO scores to assess loan applications, especially for big purchases like a home or car. Improving your FICO score can therefore have the most direct impact on your financial opportunities.
That’s where CredEvolv can make a real difference. The certified, nonprofit credit counselors on the CredEvolv focus on the actual scores lenders use. This is not always the case with traditional credit repair companies. Our counselor partners can help you understand the key factors impacting your FICO score and develop a personalized action plan to improve it.
How can CredEvolv help me improve my FICO score?
If improving your FICO score seems like a daunting task, let’s make it a team effort. CredEvolv connects you with certified, nonprofit credit counselors who are experts in credit building and have your best interests in mind. Their approach to improving your credit includes:
- A personalized credit analysis. A counselor will review all of your credit reports to see which factors are impacting your scores. This thorough review helps you understand why your scores differ and what steps can be taken to raise your FICO score specifically.
- Building positive payment habits. Since payment history is the most significant factor in FICO scoring, credit counselors will help you set up systems to ensure on-time payments. They can also suggest ways to improve your score if you have a history of missed payments or accounts in collections.
- Credit utilization strategy. Counselors can work with you to create a plan for reducing credit card balances or managing your credit usage to keep your utilization ratio low. This might include paying down high balances or spreading out expenses across different accounts.
- Guidance on building credit. If you have a short credit history, a counselor might recommend options like a secured credit card or a credit-builder loan. These tools are specifically designed to help people establish or rebuild credit responsibly.
- Identifying and disputing errors. Occasionally, credit reports contain mistakes, like incorrect account balances or payments wrongly marked as late. Counselors on the CredEvolv platform can help you identify any errors on your report and dispute them with the credit bureaus on your behalf.
- Ongoing support and accountability. Improving a credit score takes time. With CredEvolv, you have an accountability partner who will monitor your progress, adjust your plan as needed, and celebrate the wins with you.
Why should you trust CredEvolv’s nonprofit credit counselor partners?
Because they’re committed to providing unbiased support and advocating for you. Unlike some for-profit credit repair services, which can be costly and often promise quick fixes, nonprofit credit counselors work in your best interest and follow strict compliance standards to deliver honest, actionable support.
When you connect with a counselor on CredEvolv’s platform, you’re working with someone who has the expertise and tools to help you make meaningful improvements to your credit. And because they’re nonprofit counselors, you can trust that their advice is solely focused on helping you reach your financial goals.
But don’t take our word for it. Enroll today and see for yourself, knowing that you can cancel our service at any time if you’re not satisfied.
Start your credit improvement journey on the CredEvolv platform today!
Understanding credit scores – specifically, the differences between FICO and bureau scores – is a powerful first step in improving your financial health. With the guidance of a certified counselor on the CredEvolv platform, you’ll be able to make informed decisions, develop a strategic credit improvement plan, and work toward a stronger FICO score.
And when your FICO score improves, more doors open. Lower interest rates on loans, better credit card options, the chance to achieve milestones like buying a home, the list goes on. Let CredEvolv help you get there, one FICO score increase at a time!