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Why You Should Never Pay for Your FICO Score

A number can't tell you much of anything, except that creditors consider you a good or bad credit risk. But the factors that make up your credit score -- like your percentage of on-time payments -- do tell you how where you need to change your financial behavior.
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You have more than one credit score.

It's something that's been known industry-wide for some time. Now, a new study from the Consumer Financial Protection Bureau is letting consumers in on the big secret.

For years we have worshiped at the altar of FICO, thinking that one score means more than all the others. FICO has perpetuated this myth -- that its score is the one true score. It makes sense; for business reasons, companies want consumers to believe that their product is the only one out there. Think of it like the marketing of different brands of the same product. Aspirin and Bayer differ very little in performance -- they get the same job done. Your decision to buy Bayer over aspirin is a matter of brand preference.

We've bought into this mentality by purchasing our FICO score regularly, at $15 a month, believing it would show us the exact same score our mortgage lender or credit card issuer would see.

Now, thanks to the CFPB, we know that's not the case. Our pricey FICO score is just one of 49 potential scores a lender uses -- and that's only if they use a FICO score. Many lenders are starting to use new score models, like VantageScore, which is a model collaborated on by all three credit bureaus. In addition, most sophisticated lenders are using custom models which use more than a simple credit score for risk assessment.

So what do we do with this new information? Are credit scores useless? Not at all, but our attitudes toward them should change.

What the CFPB found

The CFPB's research found that different score models place consumers in the same credit range 73 to 80 percent of the time. That means there is a high correlation among different credit score models, which is something few journalists are pointing out.

Another important detail to note from the study is that lower credit scores are more correlated than higher credit scores. If you purchase a credit score and see that it rates your creditworthiness as "poor," this is more likely to remain the same across all models. The good news here is that consumers with poor credit -- those who would receive the worst rates or not be approved at all -- won't be deceived into thinking that their credit is better than it actually is.

How to react

These more-than-one-credit-score findings may lead some to believe that consumer credit scores hold no weight, but there are some other important things to consider:

  • Be wary of purchasing your credit score. Any credit score should be used as a guide as there is no way to guarantee that the score you buy is the score that the bank uses. Even if you purchase a FICO score and apply with a creditor that uses FICO scores, the score you purchased may not be the one that creditor uses.

  • Focus on the relative grade of your scores. In light of this high correlation, it's important to focus less on the three-digit number (since it will vary) and more on the relative credit grade of that score. The study found that if a consumer had a good score from one scoring model the consumer likely had a good score on another model.
  • Knowing your score is only half the battle. A number can't tell you much of anything, except that creditors consider you a good or bad credit risk. But the factors that make up your credit score -- like your percentage of on-time payments -- do tell you how where you need to change your financial behavior.
  • Your credit reports do matter. Consumer credit reports contain the information that make up credit scores. You're entitled to one free report from each of the three credit bureaus every year from If you've used up your free reports, you can monitor for changes in your TransUnion credit report for free at
  • Credit scores aren't stagnant. Something else that's important to remember is that your credit score this month (no matter which one you check) is not necessarily the same as your credit score next month. That's because credit scores are made up of various factors that can change from month to month.
  • Your credit score has always been just a piece of the puzzle

    We've never been able to rely solely on that three-digit number to tell us everything about our credit and financial life. Now, that fact is confirmed. There is a growing trend for banks and creditors to use custom attributes in conjunction with these credit scores, which is not mentioned in the CFPB's study. This means that creditworthiness is much more than just your credit score.

    Spending the money to buy just a credit score won't help you determine how to take action with your credit. Instead, check your full credit report for free at . And monitor the different factors that make up your TransUnion credit score on

    By gaining visibility into the factors that change and influence your credit rating, you'll be able to take control and apply with confidence -- no matter which credit score model is used.

    Ken is the founder and CEO of, a free credit management website that helps more than 8 million people access their credit score for free.

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