While there's no exact answer to which credit score matters most, lenders have a clear favorite: FICO® Scores are used in over 90% of lending decisions.
The most accurate credit scores are the latest versions of the FICO Score and VantageScore credit-scoring models: FICO Score 8 and VantageScore 3.0.
What Credit Score Do Lenders Use? The two main companies that produce and maintain credit scoring models are FICO® and VantageScore. Lenders most commonly use the FICO® Score to make lending decisions, and in particular, the FICO® Score 8 is the most popular version for general use.
Payment History – this is the most important and accounts for 35% of your FICO 8 Score. One late payment can have a negative impact to your score.
An Equifax credit score isn't used by lenders or creditors to assess a consumers' creditworthiness. Instead, many lenders use FICO Scores® to help determine a potential borrower's creditworthiness. FICO uses credit scores from the three reporting agencies, including Equifax and Transunion, to determine their score.
Neither score is more or less accurate than the other; they're only being calculated from slightly differing sources. Your Equifax credit score is more likely to appear lower than your TransUnion one because of the reporting differences, but a “fair” score from TransUnion is typically “fair” across the board.
Credit scores help lenders evaluate whether they want to do business with you. The FICO® Score☉ , which is the most widely used scoring model, falls in a range that goes up to 850. The lowest credit score in this range is 300. But the reality is that almost nobody has a score that low.
No credit score from any one of the credit bureaus is more valuable or more accurate than another. It's possible that a lender may gravitate toward one score over another, but that doesn't necessarily mean that score is better.
This is due to a variety of factors, such as the many different credit score brands, score variations and score generations in commercial use at any given time. These factors are likely to yield different credit scores, even if your credit reports are identical across the three credit bureaus—which is also unusual.
When the scores are significantly different across bureaus, it is likely the underlying data in the credit bureaus is different and thus driving that observed score difference.
The middle credit score is most significant when buying a house because mortgage companies ignore the highest and lowest number provided by Equifax, Experian, and TransUnion.
While Experian compiles your credit report and determines your credit score, Credit Karma simply shows you credit scores and report information from Equifax and TransUnion. Think of it this way — Credit Karma is like a newspaper that writes about the credit scores other companies give you.
While both TransUnion and Experian have some similarities, Experian offers a more robust suite of consumer services. It also reveals your FICO Score 8—the score most lenders use—which can give you a better idea of what lenders see than the VantageScore that TransUnion provides.
The main difference is Experian grades it between 0 – 1000, while Equifax grades the score between 0 – 1200. This means that there is not only a clear 200 point difference between these two bureaus but the “perfect scores” are also different, which is 1000 as reported by Experian and 1200 as reported by Equifax.
Also, lenders often create their own credit scoring models based on a person's credit history. As a result, the information in a person's credit report can be interpreted differently by creditors. Also, even when Experian and Equifax have the same information, a person's credit score can be wildly different.
This is because there are 3 credit bureaus and dozens of different scoring models. Differences in which report is pulled, which scoring model is used, and what information is reported to whom and when, can all have an impact on the credit score you are viewing.
Equifax credit scores are not used by lenders and creditors to assess consumers' creditworthiness. FICO scores are general purpose credit scores developed by the Fair Isaac Corporation, which are used by lenders and creditors to help assess consumers' creditworthiness.
Our Verdict: Credit Karma has better credit monitoring and more features, but Experian actually gives you your “real” credit score. Plus it offers the wonderful Experian Boost tool. Since they're both free, it's worth it to get both of them.
Consequently, when lenders check your FICO credit score, whether based on credit report data from Equifax, Experian, or TransUnion, they will likely use the FICO 8 scoring model. FICO 8 scores range between 300 and 850. A FICO score of at least 700 is considered a good score.
Equifax and TransUnion have different scores because slightly different information is reported to each credit reporting agency. In addition, TransUnion reports your employment history and personal information. Equifax's different credit scoring model results in lower scores.
In conclusion, auto lenders use Equifax and Experian the most, while TransUnion is less used for auto loan credit checks, at least in some parts of the US.
While Experian and Equifax are the most popular bureaus among auto lenders and car dealers, TransUnion can also be used for auto loan decisions.
Some credit cards that use Experian only reportedly include Chase Sapphire Preferred and the Citi Premier Card, among others.