Generic Credit Scores Versus Custom Credit Scores
A consumer today has potentially thousands of different credit scores. This leave the consumer in a difficult position. They must determine what score is most important to them based on the lending they will use or are already using.
Generic Credit Scores
Generic credit scores are usually what you think about when you think of your credit score. The credit scoring model uses the same formula each time. The most popular score model is the FICO score calculation. These scores are used by lenders to do the majority lending.
Custom Credit Scores
Custom credit scores are a bit more complicated. These are scores more specific for the lenders conditions. An example would be your auto loan credit score. This is a custom credit score that focuses more on the likelihood that you will pay your auto loan. Your auto loan credit score takes a closer look at your payment history to your auto finance companies and provides a better judgment to the whether or not you will make your car payments.
Obtaining a custom credit score is usually only possible through a lender. They will usually let you know at the time of a loan what your customer credit score is. Now, you might have just checked your score before you applied and got a generic score. Variation between the two is likely. Each scoring model uses a potentially different formula and based on the information used IE. which of your three credit reports, will produce several possible scores.
Navigating this as a consumer is also impossible. The best thing to do is know what is on your credit report and pick a popular credit score to know like the FICO score. By knowing a popular credit score, the better the chances your lender will use this score or at least a version of this score.
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Posted in Credit Score, FICO score
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