FICO vs. Credit Score vs. TransUnion: What's the Difference?
By Zina Kumok
Last updated 4/17/2020
Summary: There are so many different credit score terms out there, but deciphering what they mean can be confusing. Learn how to understand the difference - and what it means for your credit.
For many people, checking their credit score comes with a lot of anxiety. It’s a number that carries so much power over a person’s financial future, and understanding how to improve that score can be difficult.
Add that to all the varied terminology surrounding the topic - FICO vs. credit score vs. TransUnion for example - and it’s enough for some people to ignore their score altogether.
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But while the world of credit scoring might seem overly complex, it’s important to gain a basic understanding of the most common terms and concepts.
The more you understand how credit scores work, the better you’ll be at managing your own score.
This will open the door for better loan terms and easier access to quality financial products.
So what exactly is the difference between the terms FICO, credit score and TransUnion, and how does it affect the average consumer?
Here’s what you need to know.
What is a Credit Score?
Many people assume that there’s one standardized credit score used by every bank and lender.
In reality, “credit score” is a catch-all term referring to any score compiled by a credit scoring company - there are many of these, but by far, the most most popular are FICO and VantageScore.
A credit score is designed to be a numerical representation of your reliability as a borrower. Scores for both models typically range from 300 to 850, although FICO does have a handful of scores with different ranges.
Anything over 650 is considered good, while anything over 750 is considered excellent.
Did you know that 90% of lenders use FICO credit scores for underwriting decisions rather than the free scores you get from Credit Karma? Learn more.
Lenders, banks and credit card companies most commonly use these scores when evaluating customers.
Landlords, employers and insurance companies will sometimes use credit scores during the application process as well.
Where to Find My Free Credit Score
Finding a free copy of your credit score is easy if you don’t care whether it’s a FICO score or VantageScore. Banks like Chase and Capital One provide a free credit score, even for non-customers.
Sites like Credit Karma and Credit Sesame also supply free scores if you register for an account. All these sites and banks use the VantageScore model.
Most of these sites update credit scores once a month, but some change it weekly. The update frequency remains the same for both paying and non-paying customers, so there is usually very little reason to use a paid credit score service.
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FICO vs. Credit Score - What's the Difference?
Have you ever asked, “What is the difference between a FICO score and credit score?” It’s easier than it sounds. FICO credit scores are used by more than 90% of lenders. It has been the gold standard of credit scoring models for over three decades.
VantageScore was founded in 2006 by the three major credit bureaus - Equifax, Experian and TransUnion. This model is used most commonly with free credit score services, but is less popular with actual lenders.
You actually have multiple FICO scores. You have scores auto lenders pull, which are different from the scores mortgage lenders pull, which are different from the scores credit card companies pull for a credit card.
Understanding FICO Scores
Did you know lenders pull different FICO scores when you apply for a car loan vs a home loan? And yet another for credit cards? And the scores can vary (a LOT!) Learn more about your FICO credit scores in this guide.
Your FICO Auto Score can vary greatly from, say, your FICO 8 score (the most common FICO score). So it’s important to check your various FICO scores prior to applying for a loan. You can find all 28 FICO credit scores with this tool.
VantageScore and FICO both use similar criteria when determining a credit score, such as on-time payment history, total credit utilization, average credit age and types of credit.
Where to Find My Free FICO Credit Score
Finding your free FICO credit score is more challenging than finding a free VantageScore, but it’s still possible. The most common way is through your banking service or credit card issuer.
Discover Bank lets anyone sign up to receive a free FICO credit score, even non-customers. Users will have to provide a Social Security Number and other identifying information to register.
CitiBank cardholders can also get a free FICO score, as well as members of certain credit unions. You can also go here to get access to all 28 FICO scores.
What is a TransUnion Credit Score?
A TransUnion credit score uses data from the TransUnion credit bureau, but is still calculated with either the FICO or VantageScore model.
A credit bureau is a company that compiles lending activity for both individuals and businesses, with Equifax and Experian being the two other examples.
Because FICO and VantageScore have unique proprietary algorithms, your TransUnion score can be different depending on which scoring model is used.
The budgeting app Mint, for instance, shows a TransUnion credit score from VantageScore. That may be slightly different from a TransUnion FICO score pulled by your lender.
Think about it like two recipes for the same dish - they may use the same ingredients, but the preparation method will make the final products taste slightly different from one another.
Why Is My FICO Score Lower Than My Credit Score?
Here’s a common scenario. You check your credit score on a free site like Credit Karma and it says your score is 800. You decide it’s time to buy a house.
Then the mortgage lender pulls your FICO credit score and it comes back as 750. You’re left confused and frustrated - how can there be a 50-point difference between what you see and what your lender sees?
The reason is that lenders and free credit score sites tend to use different scoring models. Most sites that provide free credit scores use the VantageScore model, while lenders tend to rely on FICO.
Also, when you check your score for free, you’re usually only seeing a score based on one credit bureau. When a lender views your credit score, they’ll usually pull scores from all three credit bureaus. They may average the three figures or use the lowest of the three scores to determine your loan eligibility.
FICO scores may also vary because they’re based on three separate credit bureaus. Sometimes, a lender or bank won’t report account activity to all three credit bureaus, which can create differences between the FICO credit scores.
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There are also specific FICO credit score models for each type of lender. For example, a mortgage lender will have its own mortgage FICO score, while an auto lender will use an auto lending FICO score.
FICO updates its scoring models roughly every five years. FICO score 8, which came out in 2009, is used by auto lenders and credit card companies, while mortgage lenders tend to use FICO 2, 4 and 5.
Some of the distinctions between each FICO version are kept private, while others are released publicly. For example, consumers who become an authorized user on a stranger’s credit card won’t see any credit score bumps with the FICO 8 model like they would with previous models.
If you want to see all 28 FICO credit scores, click here.
*Study found 48% of professional credit repair clients who stuck with their service for 6+ months saw an average of 100+ points to their credit score. Source.
Zina Kumok is a freelance writer specializing in personal finance and got started by writing about how she paid off $28,000 worth of student loans in three years. A former reporter, she has been featured in Lifehacker, DailyWorth and Time. She also works as a financial coach at Conscious Coins.