Dear Creditnet: I recently applied for a home loan and was completely caught off guard by my credit score. I subscribe to a credit monitoring service, so I thought I knew my scores before I began the application process. Boy was I wrong! I thought my Equifax credit score was 668, but the score my banker pulled was 618. He told me they use the Equifax Beacon 5.0, so why is there such a difference? They're the same scores, right? Unfortunately, this 50 point swing is costing me an extra 1.5% in interest. Ouch!
Answer: There are a lot of credit scores out there. That's why it's so important for consumers to understand what credit scores actually matter before they begin the application process. In your case, the Beacon 5.0 that was pulled by your lender is your Equifax-based FICO score. That's a true FICO score. However, the credit score you're receiving through your credit monitoring service is probably not a true FICO score. Most credit monitoring services provide customers with a generic credit score that's generated by a credit-scoring model similar to FICO's model. Of course, that's not something they openly advertise about their credit monitoring products, since the vast majority of lenders only use FICO scores when assessing credit risk. Take a closer look at the terms of your credit monitoring service and see if it says anything specific about the type of credit score they're offering you. If it doesn't say it's an official FICO score or state that the Equifax score you're receiving is a Beacon score, then it's not a FICO score. And while the same information on your Equifax credit reports will be utilized to generate both scores, the models are different, which is why the credit scores vary. If you want to be 100% sure of what your FICO scores are before applying for credit, the best place to get them is from myFICO itself. So don't let yourself get surprised the next time you apply for credit. Visit myFICO, pull your FICO scores, and know exactly where you stand before you begin the application process.
