Are There Different Types of Credit Scores? Here’s What You Should Know

Read Time: 7 min

If you’re used to checking your credit score through a free app or credit card account, you might be surprised to know that the number you see there doesn’t tell the whole story. There are several types of credit scores.

In fact, the credit scores you see online through free credit report and scoring sites are probably not the same credit scores a lender will use when you apply for a loan or credit.

“It is important to make a distinction between consumer credit scores and the FICO scores that lenders use,” said Dylan Hoffman, a senior mortgage consultant with Fairway Independent Mortgage Corporation (Fairway owns “Consumer scores will generally be higher because they are on a larger scale. This can get confusing because there are also different FICO scoring models, depending on the type of lender.”

Below, we explain the three most common credit scoring models you’re likely to run across in the market.


Are there different types of credit scores?

  • Yes, there are three main types of credit scores: FICO scores, VantageScores, and insurance scores. In each case, your credit score is a three-digit number that represents your creditworthiness.

    Credit scores are based on a history of your credit accounts, including:

    • Mortgage loans
    • Car loans
    • Student loans
    • Credit cards
    • Personal loans

    Credit reports show detailed information about how long you’ve had these accounts, what your minimum monthly payments are, how much credit you have available versus how much you’re using (known as credit utilization ratio), and most importantly, your payment history. Your credit report also includes bankruptcies and foreclosures.

    Lenders use your credit score and credit reports to assess your creditworthiness or whether you’re a credit risk — in other words, how likely you are to repay the loan and to make your payments on time. Credit scores affect lending decisions as well as interest rates, and borrowers with higher scores are often more likely to qualify for lower rates.

“It is important to make a distinction between consumer credit scores and the FICO scores that lenders use.”


FICO scores: The one that matters when applying for a loan

The term “FICO score” comes from the Fair Isaac Corporation, which was founded by Bill Fair and Earl Isaac, who started experimenting with credit scoring back in the 1950s. But lenders didn’t really start using credit scores until well after passage of The Fair Credit Reporting Act (FCRA) in 1970.

Prior to the FCRA, consumers were often evaluated for credit approval based as much on their personality or personal appearance as they were for their positive or negative financial skills. That’s why the government determined that regulations were needed to assure that consumer credit could be fairly granted and properly managed.

Over many years, Fair and Isaac continued to refine their scoring models. Since 1989, their successful score models have been known as “FICO” scores, and they are calculated using information from your credit reports, which generally come from three major credit bureaus — Equifax, Experian, and TransUnion.

FICO scores are used by 90% of the lending community, so when you apply for a credit card, auto loan, or even a mortgage, it’s highly likely the lender will pull your FICO scores when evaluating whether to approve or deny your application.

There have been numerous revisions to the FICO scoring model since 1989, because lender credit-granting requirements, data reporting practices, consumer demand for credit, and consumer use of credit have all evolved since that time.

How FICO scoring works

  • Most FICO scoring models assign consumers a number between 300 and 850. Here’s what the FICO credit score ranges mean:

    • 300-580: Poor
    • 580-669: Fair
    • 670-739: Good
    • 740 – 799: Very good
    • 800-850: Exceptional

FICO scores and home loans

Most mortgage lenders will use your FICO scores to determine whether to approve you for a home loan and how much you can borrow. They will pull your FICO score from all three credit bureaus, and they will use the middle score for your application.

Let’s say your scores are as follows:

Credit Bureau Score

Your lender would use the TransUnion score to qualify you, since that is the middle of the three scores.

“If there are multiple borrowers on an application, then lenders will use the lowest middle score,” Hoffman said.

That means that if you and your spouse apply for a mortgage together, your lender will pull both sets of FICO scores. They will look at the middle number from each three-score set and use the lower of them on your application.

Credit score requirements for a mortgage vary based on the type of loan you plan to use to buy your home. A loan officer can tell you which loan options are available to you based on your credit score and your finances overall.

“It’s always best to speak with a mortgage professional to find out exactly how your scores can help you qualify for the type of financing that you need,” Hoffman said.

Learn more: What Credit Score Is Needed for a Mortgage?


  • In 2006, Equifax, Experian, and Transunion, released their own credit rating model, VantageScore.

    VantageScore has yet to be widely adopted by lenders, which is why your FICO score will carry the most weight when you apply for a mortgage. But lending agencies, including Fannie Mae and Freddie Mac, are evaluating VantageScores for potential use, so they could affect your credit applications in the future.

    The VantageScore model relies on many of the same factors as FICO, but they have slightly different impacts, as you’ll see below.


Category FICO Score Category VantageScore
Payment History
Payment History
Length/Age of Credit History
Length/Age of Credit History & Credit Mix
Credit Mix
Credit Utilization
New Credit
Outstanding Balances
Amounts Owed
Recent Behaviors
Available Credit

VantageScore is commonly used by free online credit score and monitoring services, and it’s used to provide consumers with educational tips about what’s affecting their current scores and how to raise their scores.

Insurance scores

The third type of credit score is your insurance score. Insurance companies use this number when determining your insurance premiums for auto, health, and life insurance. 

Insurance scores are based on information in your credit file and are used to predict the likelihood that you will file an insurance claim. Statistics show that consumers who have higher credit scores are less likely to file claims than those who have lower scores.

Insurance scores range from 200 to 997. Scores of 770 and higher are considered good, whereas scores of 500 and lower are on the poor end.

Many of the same characteristics that affect credit scores are at play with insurance scores. Typically, on-time payments, low credit utilization rates, and a long credit history will factor favorably into an insurance score.

But not all states allow insurers to use credit to determine insurance premiums. Massachusetts, Hawaii, and California have all banned the use of insurance scores.

Be vigilant about your credit score

Your credit score affects whether you qualify to buy a house, car, and other major purchases, along with the interest you’ll pay on any financing you receive. To improve your chances of approval, and to save money, be mindful of the different types of credit scores.

Learn more: How to Get a Good Credit Score and Why It Matters

Request your free credit reports from TransUnion, Equifax, and Experian each year through Review your report for any inaccurate information or signs of identity theft, and dispute any errors you see.

Critically, pay your bills on time. If you’re able, paying down debt can positively impact your score as well. But paying your credit bills on time is the number one way to reach and maintain a good credit score.

Fairway is not a registered or licensed credit management service provider. Please consult a credit counselor regarding your specific situation.