(Juan from New Jersey) Does your credit score get rated differently when buying a car verse a what you might see on the internet?
Dear Juan:
You may have experienced the reality that there are indeed multiple versions of your credit score. Not only are there three main credit bureaus that each may have a different credit score for you, they also have different versions!
I conducted my own test when I went to buy a car a few years ago. I pulled all three of my credit bureau reports with the credit scores. Three hours later, the dealer pulled my Equifax credit report in order to obtain my Beacon Score.
The result was that my Beacon Score as seen by the lenders was 15 points lower than my Score Power Score that I also obtained from Equifax. What you have to realize is that credit bureaus use different formulas for their different score products.
The consumer product that you buy on the internet is just one of many scoring products that credit bureaus provide. While you generally have only one scoring product option to buy, lenders may have multiple product options.
It can be very helpful to obtain your consumer credit scores prior to making a major purchase. For one, it gives you time to correct any errors or resolve any outstanding balances, thereby increasing your score before you buy. Secondly, it gives you more of an idea of what types of rates you should qualify for so that you can choose the best financing options.
Just understand that the scores that you buy are not actual credit scores. They are consumer products that are designed to be predictors of what your actual credit scores are. Your real scores could be higher or lower than what you believe them to be, so make sure that you are prepared for an adjustment. If you need a 760 or higher for a 0% financing offer and your score product says that you have a 770, understand that your lenders could actually see a different score anywhere from 750 to 790, and possibly even outside that range!
Tags: different credit ratings, versions of credit scores