How many types of credit scores are there?

When it comes to credit scores, most people think of a single number that determines their creditworthiness. However, the reality is more complex. There are numerous credit scores, each serving different purposes and calculated using varying criteria. Understanding the variety of credit scores can help you better navigate the world of credit and personal finance.

Credit Scores: The Basics

Credit scores are numerical representations of your creditworthiness. Lenders, landlords, and even some employers use these scores to assess your financial reliability. Scores are typically calculated based on data from your credit report, including payment history, credit utilization, length of credit history, and more.

The most widely recognized credit scoring models are FICO® and VantageScore®, but within these models, there are multiple versions and specialized scores. Let’s break it down.

The Main Types of Credit Scores

1. FICO Scores
   The Fair Isaac Corporation (FICO) created the first widely used credit scoring model. Today, FICO offers:
   • Base FICO Scores: Used for general lending decisions, ranging from 300 to 850. Examples include FICO Score 8 and FICO Score 9.
   • Industry-Specific FICO Scores: Tailored for specific sectors like auto loans or credit cards. These scores, such as FICO Auto Score and FICO Bankcard Score, have a range of 250 to 900.
2. VantageScore
   Developed as a competitor to FICO, VantageScore also uses a 300 to 850 range and evaluates similar credit factors. Popular versions include VantageScore 3.0 and 4.0.

Specialized Credit Scores

Beyond the general-purpose scores, there are specialized scores designed for specific needs:

• Mortgage Credit Scores: Used in home loan approvals, often based on older FICO models like FICO Score 2, 4, or 5.
• Insurance Scores: Used by insurance companies to assess risk and set premiums.
• Alternative Credit Scores: These scores evaluate non-traditional data, such as rent payments, utility bills, or banking activity, to assess creditworthiness for individuals with limited credit history.

Why So Many Credit Scores?

The variety exists because different lenders and industries prioritize specific factors. For instance:

• A credit card company might focus on your history with revolving credit.
• An auto lender might weigh your past car loan performance more heavily.

Additionally, updates to scoring models mean that older versions may still be in use while new versions gain traction. This creates a landscape where you might have dozens of scores depending on the model, version, and purpose.

Checking and Managing Your Credit Scores

Since you can’t control which score a lender uses, the best strategy is to maintain good overall credit health:

• Pay bills on time.
• Keep credit utilization low.
• Monitor your credit reports for errors.

You can access free versions of your credit scores through various services or directly from credit bureaus. Just remember, the score you see may differ from the one a lender uses.

Conclusion

So, how many credit scores are there? Technically, there are hundreds when you account for different models, versions, and purposes. While this can feel overwhelming, focusing on healthy credit habits ensures that most of your scores will reflect your financial reliability. Whether it’s FICO, VantageScore, or a specialized score, staying informed and proactive is the key to credit success.