Reader Question: Credit Score Confusion

Credit scores can be confusing — and for good reason. Here’s a reader question that illustrates exactly that:

I’ve always had “excellent” credit. Last Friday I bought a new car, and in the financing process it came up only “fair” — nearly 100 points below what I expected. Naturally, the interest rate on my new car was not as good as I thought it would be. But today, my quarterly credit report (which I get through American Express) came in the mail, and the rating from all three credit bureaus was “excellent”, in the range I expected.

I called the finance guy at the dealership, and he said he didn’t understand why my rating came up as it did. He implied that AmEx’s process may be calculated differently than the one they use, and that they use a monthly update as opposed to whatever AmEx uses, but he said they get it from Equifax ,and Equifax is one of the three I got today — and it gave me the highest number of the three. Have you run into this before?

A little bit about credit scores

What most people don’t realize is that there’s no such thing as “your credit score”. Instead, there are a huge number of scoring methods out there that each calculate scores in different ways. There are two general types of scores that you may be familiar with: FICO® scores and a VantageScore®. There are also many, MANY “flavors” of scoring models out there that you probably wouldn’t recognize.

No matter what scoring model is used though, they all have three things in common:

  • They all describe a point in time (the moment at which the score was calculated)
  • They all use statistics and specially-selected factors to calculate risk
  • And they’re all based on information about you, which is usually found in your credit reports

Back to the reader question

The question is basically this: Why was my score lower at the dealer when I got my car loan than it was on the paperwork I got from American Express?

There are several things I can think of that could explain that. Your Equifax score from Amex could be a VantageScore, which is typically just used to give consumers some idea of what their credit may be like.

Or, your Equifax score from Amex could in fact be a FICO score (which is what’s often used) but it might not be the same Equifax FICO score that the car dealer pulled. (Because there are multiple ones of those, too.)

Even if the the same type of FICO score was pulled both places, it would vary slightly depending on what dates they were run, because your score changes often. 100 points is a huge variation though, so I doubt that.

The last possibility is that they somehow pulled a different person’s score instead of your own, but that seems the least likely. I would get more info from the dealer, confirm their score is really for you, and if the one from Amex is NOT a VantageScore, then get a free copy of your credit report to be sure there are no errors.

What about you? Have you ever experienced something similar?


  • I don’t mean to be a conspiracy theorist, but since your lower rating translated into more interest income for the lender, isn’t it possible that nefarious forces were at work here? To be more direct: If the dealer and/or its financing arm are profiting from rating your credit lower than it should be, then they have a financial incentive to do so.

    I’d try to get a loan elsewhere–perhaps a credit union–at a lower rate that accurately reflects your true creditworthiness and pay off the dealer loan.

  • Good info to share. If you hop onto Credit Karma, it now gives you three scores. You get estimates for FICO, Vantage, and Auto Insurance scores. My scores vary greatly between the three.

  • Kurt, you’re not the only conspiracy theorist here – I thought the same thing!

    It is interesting though how a credit score can vascillitate back and forth like that. We’re getting ready to apply for a new mortgage loan, and I’m paranoid about ebbs and flows like that in my credit report!

    • Well, that’s the thing, they shouldn’t really vacillate like that unless something has changed. So, who knows. Hopefully it was just a mistake of some sort.

  • I just got my credit report back and will be writing a blog post about it soon. I have never experienced a difference in scoring as large as 100 points, but I have noticed that the score AAA reports for figuring out my auto insurance premium was quite a bit less than what my “true” scores were. Perhaps there is something fishy going on ….

    • For smaller differences, I think it’s most likely that there are different scores being used. There are a LOT of varieties of credit scores out there.