"The first FICO score saw a dramatically quick adoption and by the mid-1990s it was heavily used across different credit products," says Ethan Dornhelm, vice president of scores and predictive analytics for FICO. More than 30 years later, the company introduced the first FICO score in 1989. While lenders have been evaluating people's creditworthiness for centuries, FICO first began to use data from credit reporting bureaus to predict consumer behavior in 1956. Regardless of the confusion over the variety of available scores, credit scores are important because lenders rely heavily on them to make decisions that will impact your finances. "It's inaccurate to say, 'My credit score is x.' Although no one says it this way, it's more accurate to say, 'My VantageScore 3.0 score, based on my report from Experian, is x as of today.'" "There are countless credit scores generated to predict different types of consumer behavior," says John Ulzheimer, an Atlanta-based credit expert, formerly with FICO and Equifax. The higher your score, the less risky you appear to financial institutions. The most commonly used credit scores are FICO and VantageScore, which range from 300 to 850, but there are many versions of these credit scores, too, in part because the algorithms used to develop them are frequently updated.Ĭredit scores provide a numerical snapshot to help lenders predict whether you will repay a loan or credit card debt. You can request a credit score from each of the three credit reporting bureaus - Equifax, Experian and TransUnion - and these scores are likely to be slightly different. Checking your credit score regularly is wise advice, but it doesn't address the question of which one.
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