How Credit Scores Work mostly **Spoiler Alert** You have more than one

List of all the different models used in credit lending


FICO Scores are created by the mathematical modeling of the information in your credit report.

When you have debt or credit accounts, your lender has the option to report your account history to credit agencies. These agencies (Equifax, Transunion, Experian) then keep basically a "report card" with no "Grades" (scores) with all this information.

*******These agencies DO NOT create or maintain the FICO Scoring Models but pay for scores********

FICO scores are created by the Fair Isaac Corporation (FICO) and the models they make.

Process of getting your FICO Score
1) A lender requests a FICO score
2) Credit agency provides credit history
3) Credit history plugged into FICO scoring Model
4) FICO score generated based on all information at that point in time



***BUT WAIT, MY "FICO SCORE" from XYZ is 797 and my mortgage lender came back at 717!?!?!?!***


There are a number of reasons this could happen, some are explained below


1) You are comparing scores from different scoring models

First a link to how mortgage lenders don't use the "new" FICO models most often given out on Discover statements etc LINK

What makes someone a better borrower for a mortgage is different than a credit card. For that reason, FICO offers credit lenders different scoring models depending on what type of credit is being applied for. Mortgage models are different than auto which is different than credit cards


FICO pushes their newer models so nearly all the free credit scores you see out there are not in any way used in decisions like mortagges or auto loans

2) The score you are looking at is not a real FICO score

Credit Reporting agencies and other places have to pay FICO for the use of their FICO models. When you do say Experian Credit tracking, they will give your their own internal Experian model BS type stuff.


If you want an authentic FICO score, you must make sure that somehwere listed is the trademarked "FICO" (and it is the model you want)


3) Your credit history has changed between when you checked

If your report showed January statement balances and your accts report and update for February, your score will change based on what the updated info is. Most accounts report every statement date and takes ~3-5 business days to update at the CRAs


Your credit score uses all current information as a snapshot and scores are independent from each other. WHat I mean by that is don't think of your score as something "over time" it is based only what is in your profile right now. It doesn't show "progress"



So what should I do to get an accurate credit score?


To get an accurate credit score you need to go through Fair Isaac Corporation or FICO. THeir website can be found at LINK


Keep track of what scoring model you are paying for and make sure it is what suits your needs.


For Example Mortgage FICO SCORES are typically the following models

Equifax Beacon 5.0
Experian/Fair Isaac Risk Model v2
TransUnion FICO Risk Score 04