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4800 Overton Plaza, Suite 400
Fort Worth, TX, 76109
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Don Kelly


Arlington Texas


Don Kelly Blog

What's up (or in some cases down) with my credit score?

Don Kelly


I posted a blog about a year ago that attempted to explain and shed some light on the confusion related to obtaining your free credit report and credit score.   I continue to receive at least one call a week from a client that has pulled their credit report from the one of the various free credit report sites and cannot figure why the score i pulled is so much lower than the one they pulled.   Let me try again to explain what's going on...

First a quick history lesson might be helpful.    Engineer Bill Fair and mathematician, Earle Isaacs formed the Fair, Isaac and Company in 1956 and developed the first credit scoring model.   These models were developed as an additional tool that creditors could use to help predict payment performance and likelihood of default on various loan types including mortgages.   Mortgage aggregators ( Fannie Mae, Freddie Mac, FHA and others) began gaining confidence in the reliability of the predictive ability of the Fair Isaac scoring models and in 1995, Fannie Mae and Freddie Mac began recommending that mortgage lenders utilize the Fair Isaac (FICO) score in the underwriting process.  Since that time the value and importance of credit scoring has grown and evolved from not only a predictive tool, but now impacts pricing on all conventional loans.  Although consumers have always had a concern for  their credit scores, it was not until credit scores started affecting their mortgage rate that the real curiosity of FICO scores exploded.   FICO has without doubt become the gold standard for credit scoring and is the only score recognized by Fannie Mae, Freddie Mac , Veteran's Administration and  the FHA.   To state another way, your FICO score is the only score that matters - period, end of statement, end of story.

So now that we have a little background on the history of FICO, it hopefully will make a little more sense as to the confusion surrounding credit scores.  Because credit scores have become so important to the mortgage industry and particularly the pricing of mortgage loans, consumers are now very interested in knowing their credit score and rightfully so.   Keep in mind that FICO is not a credit repository, but merely a tool that analyzes data contained in a data file.   Your personal credit data file is retained at the three primary repositories - Equifax, Experian and TransUnion.   These three bureaus can offer your credit report and your FICO score, but remember that FICO is a copyright product and the bureaus have to pay a royalty to FICO for every credit report they produce that provides the FiCO score.   The bureaus made the decision at some point to develop their own scoring models for a multitude of reasons, of which one was to reduce costs.   The bureaus rolled out Vantage score in March of 2006 as their competing product to FICO.   Vantage utilizes a scoring range from 501-990 and FICO scores range from 300-850 so it is not hard to understand why a consumer is confused.  Vantage is the scoring model that is used by the 3 bureaus and on 99% of all the free credit report sites on the web.  The other 1% can be found at - but more on that in a minute.   All these free credit reports sites utilize the Vantage score and if you will notice, most of these sites are actually designed to sell you credit monitoring services.  It is discreetly marketed, but check them out closely and see if I'm not correct.  The most prominent of these sites, advertises that the credit score is provided by PLUS score model - remember that your FICO score is the only one that counts.   PLUS does you no good!

In my opinion, the only wise course of action is to make sure you obtain your FICO score at   MyFico has a free option and some options that require a fee but regardless of what option to select, you will be viewing the score that lenders use to analyze and price your loan transaction.   If you interested in reviewing a detailed study on this subject, please click here to view some recent findings of the Consumer Financial Protection Bureau.

Feel free to call me anytime with any questions on your credit or credit score.

Don Kelly NMLS #445473