Contrary to popular belief, you don’t just have one credit score. You have a number of them and, chances are, they all vary a bit. Your Generic FICO score is the most popular among these, but it’s not typically the score you get with those “free credit score” offers.
Many of the free credit score offers, like the one at Credit Karma, use something called the VantageScore. This model was created by the three major credit bureaus-TransUnion, Equifax, and Experian. It’s not your FICO score and it’s not necessarily what lenders use to gauge your credit. In fact, many lenders use their own scoring model, even beyond FICO.
Over at Forbes, contributor Nick Clements breaks it down:
FICO and VantageScore are examples of generic scores. Why are they called “generic?” Because any lender can buy (and make use) of the score. And the score is built using credit bureau data of the entire population.
However, most lenders build their own custom credit scores. With a custom score, a lender will build a model using its own proprietary data. Imagine you are a risk manager of a bank. You could use the FICO score (which was built using the entire population), or you could build your own model that looks specifically at people who borrowed from your bank in the past. Clearly a custom score could be a lot more useful. Banks typically use custom scores, and the general public can never get access to these custom scores.
As Clements explains, this doesn’t mean your free credit score is useless, wherever it comes from. Those scores might not have the utility you think they do, but they still give you an idea of where your credit stands. It just goes to show that more important than your actual score is your overall credit health and your range. For more detail, head to the full post at the link below.
Are Free Credit Scores Useless? | Forbes