There are many credit score models in the US which means your score could fluctuate 100 points or more. Ever wonder why they car dealership’s credit score came back 50 points lower than you had initially expected? Many consumers who monitor their scores on free credit reports are often confused when lenders pull different figures.

There’s a reason for the discrepancy: there are many credit score models in circulation today. There isn’t just one risk algorithm so points can fluctuate over 100%.

90% of lenders use FICO, buy free credit reports don’t always use the same formula as FICO. Also one score doesn’t always serve the same purpose. Every consumer has three scores: one from Equifax, TransUnion, and Experian. These scores will fluctuate based on what type of loan your score is being examined for. The algorithm used to determine credit worthiness for a credit card is different from that for a mortgage.

For an additional fee, myfico.com can give consumers a separate risk potential rating for different sectors. But these discrepancies in scores is very confusing for consumers. Credit experts are calling for one standard score. These discrepancies can have a profound effect. A 10 point change in credit score can make a person pay an extra $70 on a car loan payment every month.

It is important for every consumer to understand how the credit system works and ask lenders important questions before signing a loan application. There are a few steps to take:

1 Ask lenders what FICO version they are using: knowing what version they are using can help a consumer take necessary steps to increase their credit score.

Use the FICO stimulator: it can hell you understand what factors go into the algorithms, which can help increase credit scores
Request scores for each sector and the type of loan you’re applying for. For an extra cost, FICO can provide industry specific scores.
Use these scores to your advantage. If the scores of one of the bureaus is higher, use it to your advantage. Some lenders use Equifax, others use TransUnion. If your Equifax score is low, it’s probably best to use a lender which doesn’t use Equifax.
5.Ask your lender which score they use. Mortgage lenders often throw out the highest and lowest scores, and use the middle. Experian often has the lowest scores because most collection agencies only report to Experian.