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How some credit scores offered by card issuers differ

Erica Sandberg

August 26, 2015

QHi Erica,

Is a credit card credit score the same as a FICO score or should I get both? If I get the credit card (through Citibank) that also has a score with it, I can check it all the time for free, but if it’s fake, I’d like to know before I get the card.  — George

ADear George,

The score you would get with the Citi card is different from the one you’d purchase from myFICO.com. However, it’s still genuine. In fact, it’s what credit card issuers use to determine a person’s creditability.

Most people are familiar with the FICO score version that ranges from 300 to 850, for which numbers in the mid-700s and above are considered excellent. Like all credit scores, it’s developed by inputting the information listed on a person’s consumer credit report into a mathematical model. Some data is weighted more heavily than others, and more recent information matters most. The breakdown for this score is 35 percent payment history, 30 percent credit utilization, 15 percent length of credit history, 10 percent types of credit in use and 10 percent pursuit of new credit. And since there are three main credit reporting agencies in the United States — TransUnion, Experian, and Equifax — the scores may vary a little between them.Ask Erica

But while the score I just described is the most common, it’s just one of the rating systems that FICO has developed. The score that Citibank is providing its customers is called the FICO 8, and it begins at 250 and tops out at 900, with 800 and above being the highest category.

The FICO 8 is geared to credit card company needs, so concentrates on a person’s card usage. If you charge so much that your balance is and remains close to the credit limit, this score will be impacted in a more profound way than it would be with the typical FICO score. It also ranks an isolated late payment less severely, but if the report indicates that you’ve made a habit out of not paying on time, it will take greater toll on your score.

All this can get rather confusing, so just keep in mind that all you have to do is use credit responsibly to create a positive score, despite the algorithm. Borrow and repay on time, while also carrying low or no balances and all numbers will be in fine shape.

Still, I would not consider it a waste of money to check your “regular” FICO scores on a yearly basis. That’s because the score you’ll get from Citibank is generated only from Equifax data, and it’s a good idea to have the scores from all three credit bureaus, especially if you’ll be in the market for a new loan or line of credit. Each is about $20. Get copies of your credit report, too, and you can do that for free from AnnualCreditReport.com.

The nice aspect about having a score attached to a credit account is that you get to monitor your progress at no additional cost to you. Scores are not static, but change with your personal credit behavior. You aren’t dinged for checking, so if you do go for this credit card, take a look at your score every time you make a payment.

If you see a steady score increase over time, you’ll know you’re on track. Then, just keep up the good work. On the other hand, if it declines, analyze your credit management system. You may be overcharging or forgetting about your bills. An always available score gives you the opportunity to make an abrupt right turn before your digits veer too far from where you want them to be.

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