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The Confusing World Of Credit Scores

A recent joint survey, released but the Consumer Federation of America (CFA) and VantageScore Solutions, revealed that a large number of consumers know little about credit scores.  The survey found that:

*Two-fifths of those surveyed did not know that credit card issuers and mortgage lenders use credit scores in making decisions about credit availability and pricing.
*Between one-third and two-fifths did not know that the credit scores of co-signers of a student loan are affected by that loan – with the credit score improving if payments are made on time, and declining with one late payment.
*More than one quarter did not know key ways to raise or maintain their score – keeping credit card balances low and not applying for several cards at the same time.
*Only 7% knew that making several inquiries about getting a consumer or mortgage loan in a short span of time will never lower their FICO and Vantage Score credit scores, so consumers shouldn’t be discouraged from doing some comparison shopping.

Your credit score – that three-digit number summarizing your credit history – is a critical factor in a lender’s decision to grant you credit and what they will charge you for it.  While lenders are the primary users of credit scores, some employers, landlords, and insurance companies also use them to evaluate applicants.

Therein lies the problem.  If you purchase your credit score from Fair Isaac Corp. at, you get a FICO Score.  If you request a free TransUnion or Experian credit report from and also purchase your credit score from that website, you’ll get a VantageScore.  If you use any of these sites:,,,, or – you’ll get a PLUS Score, which typically isn’t used by lenders, and you’ll be automatically enrolled in costly credit monitoring services that you may or may not want or need.

If you’re not confused yet, try this:  Different credit scores have different numbering systems.  For example, a score of 800 from FICO is considered very good, while the same VantageScore would be considered a “C,” or just average score.

The best advice is to ask any potential lender which credit score it uses to determine your creditworthiness.  Also, a clean credit history (information contained in your credit report) will boost all your credit scores.

Before you apply for credit, take steps to clean up your credit report:
                * Pay all of your bills on time;
                * Keep each account balance at less than 25% of your available credit limit;
                * Don’t close old accounts – or open a flurry of new accounts – right before you apply for credit;
                *Don’t co-sign for another person with bad – or no credit.

If you still have questions about credit scores, contact a Member Service Representative at Health Care Family Credit Union.  We can help you sort out the facts.

Copyright 2014 Credit Union National Association Inc. Information subject to change without notice.  For use with members of a single credit union. All other rights reserved.