All three major credit bureaus -- Experian, TransUnion and Equifax -- use different scoring models, including FICO, which ranges from 300 to 850. Lenders also use different credit-scoring models, including FICO. Is there no wonder there is consumer confusion?
Several years ago, largely because of pressure from consumer groups and public officials, the bureaus began selling credit scores to consumers. It was a long overdue move. Now, knowing their scores, people can take steps to improve their credit ranking.
Equifax and Fair Isaac teamed up to provide consumers with their FICO credit scores. The other two credit bureaus, TransUnion and Experian, decided instead to sell consumers a score that was similar to the FICO score -- but not the real McCoy.
"The confusion and irritation of [consumers] is understandable," said Craig Watts, public affairs manager for Fair Isaac. "It could be avoided if Experian, TransUnion and their various consumer Web sites would only be upfront to consumers about the nature of the consumer scores they sell -- they aren't FICO scores, they aren't widely used (if used at all) by lenders. They are at best someone's estimate of what the consumer's true FICO score is."
To be fair, Experian and TransUnion do have disclaimers that inform consumers that the scores they provide aren't FICO scores. But the information is buried in fine print that many people probably don't notice.
When you order your credit score from the three bureaus, here's what you're getting:
Equifax's credit score is called "Score Power." Even though this uses the FICO scoring model, you may get a different score from one pulled by a lender because the information in your credit file is constantly changing, which means your score can change as well. The score you get this week may not be the same score a lender would get from the same credit reporting company the next. In fact, the last two statements are true for any score you may buy.
Experian calls its credit-score product "PLUS Score" and bases it on factors similar to but not the same as FICO. The PLUS Score ranges from 330 to 830.
TransUnion's credit-score product is also not a FICO score, but it is based on the bureau's own proprietary scoring model, which is why the Los Angeles reader's score was outside the FICO range.
So, in addition to scratching your head, you may still be wondering which score to buy.
Well, keep this Cooley quote in mind: "In the theater of confusion, knowing the location of the exits is what counts."
At least you now know why you may have received a different score from one shown to you by a lender.
"The key message is that there isn't one credit score, there are a lot of different credit scores," said Heather Greer, a spokeswoman for Experian.
The key message here is that until there is one uniform credit-scoring system, consumers will continue to be confused and probably be forced to buy more than one score to get a rounded picture of their credit standing.
Michelle Singletary discusses personal finance Tuesdays on NPR's "Day to Day" program and online at www.npr.org. Readers can write to her at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071 or send e-mail to firstname.lastname@example.org. Comments and questions are welcome, but because of the volume of mail, personal responses are not always possible. Please also note that comments or questions may be used in a future column, with the writer's name, unless a specific request to do otherwise is indicated.