Different types of credit scores

Different types of credit scoresA credit score is one of the most important numbers in your life, as it essentially determines your financial worth and whether lenders will see you as a good investment. The most popular score that we hear about is a FICO score, which is widely used among creditors. However, there exists several others.

While the NextGen Score is similar to the FICO, in that it is calculated in a similar way and was designed by the same company, it is not often used in determining one's financial standing.

The Vantage Score has achieved more popularity among lenders, as it was introduced by the three major credit bureaus – TransUnion, Experian and Equifax. It was introduced as a competitor to FICO, though it is only used by 6 percent of the market.

Other scores offered, such as the CE Score, are not officially recognized, but are estimated figures based on a certain algorithm to provide personal credit education to consumers. These numbers are not reported to credit lenders.

When applying for car loans and other types of credit, make sure you know which type of score your bank uses, so that you can check your credit report and make sure that you are in good financial standing.