In detail
Educational scores are credit scores that companies provide to consumers to give a general sense of credit history. They are often available through online banking portals, credit monitoring services, or nonprofit counseling agencies. Unlike the scores that lenders use to evaluate credit applications, an educational score may be calculated using a different scoring model, a different version of a model, or a different data set. For example, a bank might display a VantageScore to its customers while using a FICO score for its own lending decisions. The Consumer Financial Protection Bureau has noted that educational scores can differ from lender scores, sometimes by a significant margin. The purpose of an educational score is to help consumers understand how their credit behavior might be reflected in a credit score. It is not intended to predict the exact score a lender will use or to serve as the basis for a credit decision. Many providers label these scores as 'educational' to distinguish them from the scores sold to lenders. Some educational scores are free, while others are included as a feature of a paid subscription. The Fair Credit Reporting Act governs how consumer reporting agencies handle credit information, but educational scores are often not the same as the risk-based pricing or disclosure scores that the law requires in certain situations. Consumers may see multiple educational scores from different sources, each based on different models and data. These scores can vary because of differences in scoring ranges, the weight given to various credit factors, and the timing of data updates. An educational score is a tool for learning about credit reporting, not a definitive measure of creditworthiness. It is useful for observing general trends in a credit report, but it should not be assumed to match the score a specific lender will obtain.