There are multiple versions of your credit score

Consumers deserve to see the ones lenders see

WASHINGTON — Let’s hope a huge mistake by Equifax will lead to something consumers should have access to for free — the exact credit scores lenders use to determine their creditworthiness.

Equifax, one of the three major credit bureaus, acknowledged in August that between March 17 and April 6, a coding issue resulted in the possible miscalculation of information used in credit model calculations.

The credit bureau said the issue was fixed by April 6 and ... “for consumers who attempted to obtain credit between March 17 and April 6, 2022, and think their decision may have been impacted, Equifax advises they reach out to the lender for more information,” a spokeswoman for Equifax said in an email.

... Aside from the fact Equifax needs to be more transparent about what steps it plans to take to assist affected consumers, this recent error is a good time to renew the call we deserve free access to the same credit scores lenders get.

You might be thinking, “Hey, I can get a free credit score.”

True, credit card companies, banks, credit unions, and credit monitoring services now routinely provide consumers free scores.

But what you may not realize is that when you check your credit scores, you’re not necessarily receiving the same score as your lender.

Equifax explains the difference this way: “What you generally see are educational credit scores, meaning they are intended to give you a close idea of your scores for informational and monitoring purposes. While they are a good way to gauge your credit rating, you may not be seeing the exact same numbers as your lender.”

There’s more. Your score can vary depending on what scoring model is used and which credit report is accessed to generate the score. There’s the credit scoring juggernaut FICO, the scoring system most used by lenders. But even the scores under the FICO brand can vary. FICO has updated its scoring model several times. But this does not mean that lenders use the latest versions.

Wait, there’s more. In 2006, VantageScore was created by the three credit bureaus — Equifax, Experian, and TransUnion — to compete with FICO. It also ranges from 300 to 850.

A high score, whether FICO or VantageScore, along with other factors lenders consider can place you in a tier that results in the best lending deals. Even a small drop in your score can push you into a less desirable lending category, lowering the amount you can borrow and increasing the interest and fees you pay.

I routinely pull my “education” credit scores. All the institutions using FICO put my credit at a perfect 850.

But at my credit union, I have access to two different score models. One uses FICO Score 9 based on data in my Equifax credit file. The other uses VantageScore 3.0 based on my TransUnion credit report. The VantageScore report says my score was 832 as of Aug. 1.

All these different scores create confusion for consumers. It also puts them at a disadvantage in catching a miscalculation like the one made by

Equifax.

If you pull your free credit scores meant just for educational purposes and see you are usually in the 700plus range, you might be overconfident you’re going to get a good deal. But that may not be the case if the score received by a lender is lower, pushing you into a less favorable pricing tier . ...

The Florida-based law firm Morgan & Morgan has filed a classaction lawsuit against Equifax for allegedly providing inaccurate credit scores.

The class representative, a resident of Jacksonville, Fla., alleges she was denied an auto loan in April after the report Equifax provided to the dealership showed a credit score that was inaccurate by 130 points. As a result of the error, the borrower now pays $154 more for her car loan per month, according to the complaint filed in the U.S. District Court in the Northern District of Georgia. ...

Consumers have the right to get the same information the lenders get so they can make the best decision about when to apply for a loan.

It’s been almost 18 years since the Fair Credit Reporting Act mandated consumers, upon request, receive a free copy of their credit report once every 12 months through AnnualCreditReport.com. At the start of the pandemic, the bureaus began offering free weekly online credit reports and have continued to do so.

Just like consumers fought for free access to their credit reports, we are long overdue for the same access to the exact credit scores lenders use. The Equifax coding issue should be the push needed to make it so.