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Two years ago I moved to the United States and got a brand-new, never-used social security number. I started with a blank slate. I have read "How much does credit score matter" and I've read "What is a good credit score" referenced on that question.

Since then, I've only done two credit-related things:

  • In December 2015 I leased a mid-range car on a 2-year lease. I paid a higher than typical monthly payment due to my non-existing credit history, but I have never missed a single payment.
  • In early 2017 I tried my luck on an American Express platinum card and was approved immediately. I've never had any relationship with Amex before the application, and I did not lie to any question (of which there was only "Name, Address, SSN, total income").

I do not carry any credit cards or loans (the Amex is a charge card and I pay it in full twice a month). Credit Karma is telling me I have a credit score of 655 (TransUnion and Equifax), American Express is telling me I have a score of 716 (Fico). These two numbers are wildly different.

This seems to be telling me that:

  • Getting a positive credit rating is quite simple
  • Income is more important than credit. According to Credit Karma, only 14% of people with an American Express Platinum have a score equal or lower than mine - but Amex gave one to me anyway.
  • There is a an element of randomness in how credit scores are reported and used

Are these assumptions correct? Or have I just been lucky?

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    I'm answering the first part of your question - why are they different. The rest of your question needs to be separated into a different question, as "why are these different" is totally unrelated to "why did I get an Amex". – Joe Jun 1 '17 at 14:07
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Every credit bureau has their own formula for determining what your score is, as well as every bank. Most likely Credit Karma and American Express are using different calculations for coming up with the score.

Getting a positive credit rating is simple if you know how to manage your debts as well as how to play the credit "game".

Income is not necessarily more important than credit. I had a 750+ credit score in college when I had essentially no income, but I had multiple credit cards, this is because I managed my debts and paid off my credit cards before the cycle closed, so then when it was reported to the credit bureaus, the bill was 0 or close to it (thus lowering my credit utilization ratio).

The numbers can seem random, but it really depends on who is calculating your score and what type of loan you're applying for.

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There are a couple of potential reasons.

First, the three credit bureaus are individual agencies, and by that I mean they each compile their own list of information. In particular, any given creditor may report to one, two, or all three bureaus - it's up to them to decide. Credit cards tend to report to all three, but your car lease may well be on only one. You'd have to look at the report to see exactly why they're different (or if they are) for this reason. Inquiries, accounts, payment history, all could be different.

Second, Credit Karma is reporting your VantageScore (I think Vantage 3.0 specifically), which is a proprietary algorithm for turning that report into a score that was created by the three bureaus. Amex is apparently reporting your FICO score, which is a different (but similar) algorithm created by the Fair Isaac Corporation (hence the name). The scores are not identical, though they're intended to be similar. You can read about the differences here; while they are both on the same 300-850 scale, and generally consider the same set of factors, they weight some factors differently - hence the differences.

  • Wait, the FICO score and the individual credit scores are two different things? The rabbit hole goes even deeper... no wonder they were different. Everything seem so much more complicated than it needs to be. – Mark Henderson Jun 1 '17 at 14:43
  • @MarkHenderson The individual credit bureaus each collect information (not scores). There are then different (many!) algorithms that turn that information into scores; any of those can be run on any one of the three bureaus. So AMEX is telling you your FICO score, but it's not telling you where that's from - it's from one of the three (Equifax, Experian, or TransUnion) still. The rabbit hole goes way deeper by the way; you can have different FICO scores depending on what you're applying to (car dealer cares about different things than credit card issuer). – Joe Jun 1 '17 at 15:00
  • @MarkHenderson And (as I believe I understand it from other Q&As on this site) the score you see (any of them) is not necessarily what any institution will use to decide whether to accept you or not for a product, or at what rate. – TripeHound Jun 1 '17 at 15:12
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Getting a positive credit rating is quite simple

I agree completely with this. Commit to debt you can manage, don't overspend on credit cards and you'll be fine.

Income is more important than credit. According to Credit Karma, only 14% of people with an American Express Platinum have a score equal or lower than mine - but Amex gave one to me anyway.

Most people in the US don't have the stomach for the Amex Platinum annual fee and likely don't travel enough for the perks to justify the fee. It's a really unusual card to get first.

Like you mention the Platinum is a charge card, for Amex your income probably had a lot to do with approving you along with the fact that you were applying for a high annual fee card where you pay in full each month. This might not be the case with other lenders or even other Amex products.

There is a an element of randomness in how credit scores are reported and used

There is a lot of randomness. There are three major reporting agencies. All three sell up to the minute credit data, and older less expensive credit data. There are other vendors who sell even different regurgitated credit data from the three bureaus. Depending on how much a particular lender believes in credit scoring they will check some data set which may be older than another and may be different from a different lender and you generally won't know from where data is pulled.

The deviations in your score may just be a time delay, it may also be an algorithm difference and may be a combination of the two. Ultimately your income isn't considered in your credit score and income is likely more important to some lender underwriting departments than credit score and that will be different between different lenders and different types of debt; as you've experienced between the car dealer and Amex.

  • Fair point about the Amex being an odd card to choose. My reasons for choosing it are purely selfish - I've already had more than $550 of value off its annual fee. I was about to purchase a Qantas Club membership (for more annual $ than the Platinum) and saw the Platinum card benefits and went in that direction instead. I mostly still use debit for a lot of purchases. – Mark Henderson Jun 1 '17 at 18:38
  • @MarkHenderson, agreed it's a great value if you use it. I was about the pull the trigger on a Platinum myself but Chase had just released the Sapphire Reserve and I ended up going that direction instead. – quid Jun 1 '17 at 18:44
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The answer is simple:

  1. The scores vary because they use different algorithms to calculate the score.
  2. The scores vary greatly because your credit history is both young and has very few accounts. As you obtain more credit and a longer history, the numbers will probably become closer, but they will never be the same due to #1.

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