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Why non-FICO credit scores aren't worth buying

If you are using a paid credit score service, other than myFICO, to look at your score, you probably won't get the same one your lender will.

By MSN Money Partner Apr 3, 2012 10:54AM

This post comes from Miranda Marquit at partner blog Bargaineering.


Image: Woman with laptop (© Noel Hendrickson/Digital Vision/Getty Images)By now, many people are well aware that the credit score is an important factor in finances. Your credit scores can have a bearing on the interest rate you receive, possibly saving or costing you hundreds of dollars. Additionally, your credit scores can also influence the insurance premium you pay, and affect other decisions related to finances.


But the main reason people worry about their credit scores usually has to do with borrowing money. And, in many cases, the credit score used is the FICO score.


How many credit scores do you have, anyway?

Most lenders use the FICO score to make decisions about whether you qualify for a loan, as well as the interest rate you receive. So, before you apply for a loan, it can help to check your credit score. However, the score you're checking right now might not be your FICO score. (Post continues below.)

You actually have several credit scores. Each of the three major credit bureaus has its own score, based on the information in your report. The algorithm for figuring out your credit score for each is slightly different. If you check a website owned by Experian for your credit score, it will likely be different from your actual FICO score. The same is true of credit score sites owned by TransUnion and Equifax.


On top of these different credit scores, some lenders also have their own versions of credit scoring. These credit scoring models might weight different factors, or concentrate on certain behaviors. The result is that you actually have several credit scores. Indeed, a check of my credit scores from each of the three major credit bureaus, and from FICO, shows a variance of 25 points between the lowest and highest scores.


If you want to know what a mortgage lender is most likely to use to make a decision, you need to check your FICO score, because scores can vary from source to source, and that score is rarely free to view. Don't be fooled: Many of those paid and free credit score sites offer scores that are different from FICO. (In fact, Experian has been sued for allegedly defrauding consumers who think they will get their FICO score when they visit


Are other scores useless?

Getting a free score from a site like Credit Karma, Credit Sesame, and Quizzle isn't necessarily useless, even though it's not your actual FICO score. You can get a general idea of the progress you are making with these free services, so they do have value. You can see whether your credit situation has improved, or whether it has become worse. Even if you aren't seeing your FICO score, you are still seeing information about your situation, and you can learn about what actions you can take to improve your credit score. (Estimate your credit score for free.)

However, if you are using a paid credit score service, other than myFICO, to look at your score, it's usually not going to be worth your money. Although you are getting a credit score, it isn't your FICO score, and it may not provide you with an accurate picture of how lenders see you.


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