When is your credit score not THE credit score?

Everyone has credits scores – multiples of them because there are multiple different credit rating companies, each with their own credit scoring approach. Now a report from the Consumer Financial Protection Bureau (CFPB) states that consumers may also have different credit scores from the same rater, depending upon who pays for the report. A story on the RealtyTimes Web site reports on a recent study done by the CFPB.

 Lots of people use credit scores for a great variety of reasons, obviously usually having to do with extending credit; however, in real estate they are also used as a part of the vetting process for would-be renters. Usually I advise people looking ot lease to go to one of the free credit report sites and pull their free credit report. Those reports don’t usually include a credit score, which the sites charge extra for; however, they do provide documentation of the current state of the credit of the would-be renter. Most landlords will accept just the report and not demand a credit score.

It is a bit disturbing to read that a potential creditor might get a different credit score if he/she pays for it than you would get if you paid for it yourself. The CFPB report puts the chances of that at up to 19 to 24% of the time. So, almost a quarter of the time a creditor might see you in a different risk category that you saw yourself in when you pulled the report – usually towards the low side, by the way. That’s disturbing. You may still get rejected for credit and not even know why.

So, what is a good credit score? I guess that depends a little on who is asking and what criteria they are using. At the site credsitscorereange.net a poor credit score is shown as between 340 – 619, a fair credit score is between 620 – 659, a good score in the range of 660- 749 and an excellent credit score between 750 – 840.   

 

Here’s another credit score range from oskie.com

    Between 700 & 850 = Very good or excellent credit score

    Between 680 & 699 = Good credit score  The Average American Credit Score = 682       

    Between 620 & 679 = Average or OK score.

    Between 580 & 619 = Low credit score

    Between 500 & 579 = Poor credit score

    Between 300 & 499 = Bad credit score

I think it’s valuable to see that the U.S. Credit Score Average is 682. So, if you are above that you should be in good shape. Below it, watch out!  What credit score do you need to buy a house? Most lenders want to see a 620 credit score or better for an FHA, VA or USDA loan. For a “conventional loan”, not backed by one of the government bodies, at least a 650 score is what the lenders want to see.

The advice for consumers that came with this article was fairly consistent with past advice – consumers should check their credit reports at least once a year and should aggressively work to clear up any mistakes or old issues that have lingered on the report after the issues were cleared up.  It is probably worth the $10-15 once a year to pay to see what the company is reporting as your credit score, even if it might be a little off compared to what they would report to a potential creditor.