Most home purchasers know that there are three credit bureaus: Experian, Equifax, and Transunion. These bureaus are repositories of information from all participating creditors.
Before credit scores existed, credit bureaus collected and provided information about creditworthiness to lenders. The first credit score was created in 1989 by the Fair Isaac Corporation who created the FICO® score. Fair Isaac and other competitors use the credit information to calculate a score.
What most home purchasers don’t know is that not only are there several companies who create models for scoring credit, but also that these companies themselves have multiple score models.
Fair Isaac alone has about fifty FICO® scores. The company provides differing models and scores for each type of credit a person is applying for, because the scorereflects their creditworthiness for that type of credit: mortgage, auto loan, credit card, etc.
If you track your credit score online, or purchase your credit score online, you may be purchasing a FICO® score, or another company’s score, but even if it’s a FICO® score it’s not FICO® score model for a mortgage.
It’s for this reason that you’ll find variations in your score you see online versus the score that we pull for a mortgage. While you’ll find correlation in all the various scoring models, the calculations behind them will generally produce differing scores.
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