Credit Report Q&A

Do I need to know all 3 of my Credit Scores?

Dear myFICO,

We're working hard to get our finances in shape to buy a home and we want to get the best interest rates possible. Which scores and credit reports will the lender check when we apply for a loan? Will they look at all of the 3 main credit bureaus? We'll also need a car in the next year also. Do auto loans work the same way?

Baltimore, Maryland

Dear Audrey,

When you apply for any kind of loan, the lender may be looking at FICO® Scores and credit reports based on data from all three credit bureaus, or may just access one of the three, but you have no way of telling which one. Let me explain.

In the U.S., there are three national credit bureaus (Equifax, Experian and TransUnion) that house credit histories on most of us. Each of these agencies uses the FICO® Score algorithm to produce a version of the FICO® Score based on the data they collect on each consumer. Lenders request these scores when evaluating consumer credit applications. Lenders determine which credit report and credit score they want to access on you – and if they want to use just one, two or all three.

How do you know which credit bureau the lender is using?

Generally speaking, most lenders will access a credit report and FICO® Score based on all three credit bureau's data on applicants for new home loans and refinancing. A mortgage lender may require that all three FICO® Scores are above a given cutoff or they may look at the three FICO® Scores and base their decision on the middle score being above a set cutoff. Each lender determines their criteria based on their own analysis and/or industry guidelines.

For other credit products, such as credit cards or automobile loans, the lender will typically access just one credit report and associated FICO® Score to use in their credit decisioning. One of your lenders may be using a FICO® Score based on data from "credit bureau A" while another may be using a FICO® Score based on data from "credit bureau B".

While each lender determines the different types of information they use to evaluate your application, you can be fairly certain that your credit report and FICO® Score feature prominently in the mix based on the simple fact that how you have managed your credit in the past is extremely predictive of your future credit management performance.

That's why it is important for you to periodically check your credit report and FICO® Scores based on data from all three credit bureaus to ensure the information reported on you is accurate, up to date and that the FICO® Score based on each credit bureau's data is reflective of your credit risk.

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