Let’s ensure that it stays real, OK? When it comes to credit scores, numbers – namely, your three-digit score as well as the amount you have to pay to gain access to it – are all what really matters.
In simpler terms, it doesn’t matter what kind of credit score you obtain – whether FICO or Vantage, for instance – or where you get it, as long as the source is reputable and you also receive maximum access for minimal cost. And if you don’t buy into that notion, listed here are four fundamental explanations why looking for a specific type of score – or ever paying for one – is a fool’s errand.
Precisely what credit score do you need to check?
1. You’re looking for a needle in a haystack.
There are more than 1,000 different types of credit scores currently in use, as outlined by Experian, and each model produces a unique result depending on which of the three major credit bureaus is supplying the underlying information. To put it differently, you are likely to have a very difficult time trying to identify the exact type of credit score a particular lender will use to gauge your application.
Further complicating matters, there’s no method to tell whether a given lender runs the numbers based on more than one bureau’s data. And even if you somehow learn that they do, good luck trying to see whether they ultimately rely on an average, dismiss extremes or otherwise process the data.
2. Lenders’ scores are off-limits.
Why don’t we assume that you’re somehow successful in finding that needle in the haystack. Exactly what are you planning to do concerning the fact that the majority of sophisticated lenders modify publicly available scores with their own in-house data, creating proprietary scores that consumers can’t access?
There’s really not much that you can do.
3. Credit scores are highly correlated.
The whole idea behind checking a particular credit score is to get a better sense of whether you could get approved for a certain loan or line of credit and, if you do, what terms you may expect. But that fundamental rationale is wrong.
Even if you manage to find the specific credit score that your lender uses, it’s not going to provide you with much of an advantage over other popular scores that are probably easier (and cheaper) to get. That’s because there’s more than a 90 % correlation between commonly available credit scores, in accordance with the Consumer Financial Protection Bureau. In other words, most credit scores are similar enough to make searching for a certain type a waste of time.
4. Lenders take much more into account.
Credit scores aren’t really the only data points that lenders consider. Most notably, these three-digit representations of financial responsibility don’t directly reflect income or all existing monetary obligations, which obviously play a role in the affordability of a new loan or line of credit.
As just one piece of a bigger puzzle, credit scores merely provide a rough approximation of your approvability and the terms you can expect to be offered.
Finally, it’s worth noting that 44 % of people haven’t checked any type of credit score, even once, during the past 12 months, according to the National Foundation for Credit Counseling. So are we really in a position to be all that picky? Credit scores require regular care to flourish, and providing this tender loving is easier than ever before, with all of the free-credit-score options available today.
So start paying some attention to your score, wherever you can get it, and your wallet will begin to see the efforts pay off before long.
We work with several lenders here in the Tampa Bay that can assist you with your financing needs. To get started give us a call at 813-300-7116 or simply click here and let us know what you need in your new. Then we can get started working for you.