Editorial Policy

Competing over credit scores? Not so fast

Laura Mohammad

March 28, 2014

My husband and I have a bit of a competition when it comes to our credit scores.

Both of us have FICO scores in the 800s, and we find ourselves comparing notes when we pull them.

But I had read that competing with your spouse to get a better score is not a good plan of action. I wanted to know why.

I turned to credit bureau Experian’s Director of Public Education Rod Griffin, who actually has first-hand experience with this.

He bought some property with his wife recently, and her scores were better than his — even her Experian score.

How did that make him feel?

“Perturbed,” he says, “because of who I work for.”

But is it healthy to compete? “I guess it depends on who’s winning,” Griffin jokes, noting that women tend to have better scores, albeit by a small margin.

With a sample of 750,000 consumers, Experian found that women’s average VantageScore figures were 675 to men’s 674, on a scale of 300-850. (VantageScore is a credit scoring model developed by credit bureaus Experian, Equifax and TransUnion to compete with the more commonly used FICO scoring system.)

It’s hard to gauge why, but men’s debt loads were higher, says Griffin. The average debt (credit cards, auto loans and personal loans) carried by men, according to the May 2013 study, was $26,227 to women’s $25,095. Also, men’s revolving utilization ratio — how much debt they carry compared to how much available credit they have — was higher, with 31 percent for men and 30 percent for women. (A credit utilization ratio of less than 30 percent is optimal.)

“The average scores for both weren’t great,” Griffin says. “But, men tend to use credit more, utilization is higher and they carry more debt.”

But credit scores aren’t like baseball scores, says Griffin. “There isn’t a winner or a loser.”

Scores go up and down like the stock market, rather than a score in a game. “The winner could be different in 10 minutes,” he says. “You may have paid off a debt, or a late payment fell off your report.”

If you are going to compete, Griffin says, make sure you are comparing the same scores. For example, VantageScore switched last year from its 2.0 generation, with a range of 501-990, to 3.0, with the current 300-850. You don’t want to compare scores from different generations.

And, although FICO also uses a 300-850 scale, the two models have key differences.

VantageScore primarily weighs  payment history (40 percent), age and types of credit used (21 percent) and credit utilization ratios (20 percent), while the more frequently used FICO primarily looks at payment history (35 percent), amounts owed (30 percent), length of credit history (15 percent), new credit (10 percent) and credit mix (10 percent).

Rather than focusing on your score, it’s more productive to look at why the numbers are what they are, Griffin says.  When you get your score, you will also get what Griffin calls a “score report,” which will give you information about any problem areas that may have impacted the number.

“Look at it as a financial tool to make good credit management decisions,” he says. “You need to use your score to improve your creditworthiness. It may be fun to compare with your friends, but really, it’s a tool to make you more successful as a consumer.”

The scores should be a tool to help you work with your honey, rather than against, Griffin adds.  Work with your partner to get the credit you want, he says. In fact, Griffin doesn’t even look at his scores unless he is going to make a purchase. “If you worry about your credit report, the scores will take care of themselves.”

What should you care about? Two things, Griffin says: Pay all of your bills on time every single time, and keep your debt as low as possible. These practices should keep your credit reports golden.

“The object with the credit score isn’t to get a perfect score. It’s not like a paper in school. It’s next to impossible to get a perfect score,” Griffin says.