 TITLE: Why Do I Have So Many Credit Scores? CONTENT: So What Exactly Is a Credit Score?\n----------------------------------\nA credit score is a three-digit number that's calculated by applying a mathematical algorithm to the information in one of your three credit reports, which are generally updated each month.\nGenerally, the higher your credit score, the more likely you are to receive favorable terms on a loan, like lower interest rates and higher dollar limits. That can translate to significant money over time, especially on big-ticket purchases like a home, where a slightly lower interest rate can save you thousands of dollars over the life of your mortgage. Higher credit scores also qualify you for the best deals on credit cards and other personal loans.\nBut, as you may have surmised from my list of varying credit scores, you don't just have one. In fact, you likely have dozens of credit scores, if not hundreds or even thousands. That's because there is no uniform algorithm employed by all lenders or other financial companies to compute credit the scores.\n\"There is no one score,\" says Veronica Herrera, director of product solutions at Experian. \"There are hundreds of different scoring models used by lenders. And there are thousands of more custom scores.\"\nCustom scores are based on specialized risk algorithms tailored to a specific lender for a specific purpose, like auto loans. A custom scoring model may place more or less weight on certain factors based on the type of credit that will be extended and the potential risks associated with it.\nYour credit history is maintained in reports at three different credit bureaus: TransUnion, Equifax, and Experian, the publisher of this piece. Because all lenders don't always report information to each bureau, the same scoring model using the data from one credit bureau could yield a different score when using data from another credit bureau.\nThere's an important distinction you should know as well: The credit reporting companies are not the entities that make loan and credit decisions. If you have credit denied or are approved for a higher interest rate than desired, that's because a specific lender or creditor reviewed various criteria such as your credit scores, information from your credit report (such as your past payment history), and other factors not included in your credit report (such as your income), and then decided not to extend you additional credit. Learn more here about how information gets on your credit report here. END