Why You Can't Get The 'Real' Credit Score Lenders Use

John S Kiernan, Senior Writer & Editor l January 2019


Most people would say their "real" credit score is the same exact one used by lenders and insurance companies. Well, guess what? Such scores are effectively impossible to get. Below, you'll see why that's the case and learn why being unable to obtain your "real" credit score doesn't really matter.

  1. 1,000+ Credit Scores Are In Use: The sheer number of available credit scores diminishes the importance of any one model and illustrates the folly in hunting for the needle in a haystack that is your lender's score of choice.

  2. Sophisticated Lenders Use Private Scores: Some of the most advanced lenders, including many major credit card companies, use their own proprietary scores, which are usually based on publicly available scoring models. They undergo in-house modifications, producing results that outsiders aren't privy to. So you'll never know exactly how the score that a lender uses to evaluate you differs from the score that you use to monitor your own credit improvement.

    Research by the Consumer Financial Protection Bureau further supports this notion, finding that when a consumer purchases a credit score, "it is likely that the credit score will not be the same as the score used by a particular lender or other commercial credit report user in making a lending or other score based decision with respect to that consumer."

  3. Major Scores Are Basically All The Same: Credit scores are products which means the companies that offer them have an interest in making them appear distinct. However, research by the Consumer Financial Protection Bureau contradicts their uniqueness. The CFPB analyzed 200,000 consumer credit files through the prism of a wide range of credit score models and found that, "correlations across the results of scoring models were high, generally over .90." Furthermore, "the scores produced by different scoring models provided similar information about the relative creditworthiness" of most consumers.

    That means "good" credit by one scale was generally "good" by another, for example.

  4. There Are Three Sides To Each Score: Every credit scoring model produces three results, one for each of our major credit reports: those from TransUnion, Equinox and Experian. Even if you could get your hands on the exact type of score used by your lender of choice, which you most likely can't, you'd still have to figure out which report(s) the lender uses, thus turning the answer into even more of a needle in a haystack. In other words, the juice just isn't worth the squeeze.

  5. Lenders Consider Multiple Scores: There's often more than one answer to the question of which credit score a given lender uses – a fact that can fuel a whole new stream of uncertainty. If a lender considers multiple credit scores, perhaps one from each bureau, which of those scores is actually used as the deciding factor? Or is some other sort of metric, such as an average, employed instead?

    This is a real concern for anyone seeking the exact measuring stick used by a given lender, and there's really no way to tell. Consider, for example, the fact that Fannie Mae – one of the largest buyers of U.S. mortgages – recommends that lenders obtain "at least two credit scores for each borrower" and instructs them to rely on the lower of two scores or the middle of three. Unfortunately, that doesn't provide enough specificity to completely solve the mortgage credit score conundrum.

Why Your "Real" Credit Score Doesn't Really Matter

There's not much you can do about the fact that it's pretty much impossible to get your hands on your real credit score – the one lenders use. But realizing that you aren't really missing out on anything should make you feel better. And here are a couple of prime reasons why that is the case:

  1. Reputable Proxies Are Available: Whether your lender uses a proprietary credit score or one of the commonly available models, its primary objective is to predict your risk as accurately as possible. And just because you might not be able to find the exact measuring stick your lender uses doesn't mean you can't perform the same type of exercise on yourself before applying. In other words, if you find a reputable score with a solid reputation (e.g. VantageScore or FICO), it will give you a good enough sense of your standing to determine your odds of approval.

  2. Credit Scores Don't Tell The Full Story: A borrower's payment history is an important indicator of future performance, but it's not the only information relevant to lenders. The past means nothing if the person lacks the income or assets needed to satisfy current and upcoming debt obligations.

    Such information is not baked into your credit score. And since lenders will thus rely on credit scores only to a certain extent, you should follow suit.

  3. Choosing Financial Products Is Far More Important: Picking the wrong credit card, auto loan, mortgage, etc., for your needs represents a far more valuable mistake than relying on one type of credit score over another. After all, a score that's "good" according to one model will likely be good" according to others as well, with the same being true for "excellent," "fair/limited" and "bad" scores, too.

    That means the risk of applying for an offer for which you have no chance of approval due to your credit score choice is rather low. But if you don't spend time researching offers before applying for a financial product, you could easily end up costing yourself hundreds of dollars per year. So make sure to allocate your time wisely, using potential savings and undue costs as a barometer for what to prioritize.

At the end of the day, your top priority should be to find a trustworthy, free option that gives you as much access to your credit data as possible. Then use that same score consistently so as to have an accurate basis for measuring growth.

With that in mind, you can check your credit score for free on WalletHub — the only service to provide free credit scores and full credit reports that are updated on a daily basis. You'll also enjoy 24/7 credit monitoring, customized credit improvement advice and personalized money saving tips.