Borrower Beware – All Credit Scores Aren’t Alike
Not necessarily as. The fact is there are several unique credit scoring methods. Credit scores estimated out of the same credit accounts are able to differ considerably from credit scoring strategy to credit scoring method. So just how can you possibly know what your credit score actually is? Well, luckily, seventy five % % of lenders apply FICO scores exclusively and you can obtain FICO scores yourself–you only need to discover where you can go.
FICO credit scoring was developed by Fair Isaac and Company like a numerical approach to determining your credit worthiness. The scores vary between 300 and 850 and are essentially based on your past bill paying performance.
It would be simple in case everyone used the scoring system, but the 3 major credit bureaus each have the own model of theirs of the FICO score: Equifax makes use of the Beacon system, TransUnion utilizes the Empirica process, and Experian utilizes the Experian/Fair Isaac process.
Althought they each use slightly different systems, all methods are based on the original FICO scoring method so usually the score of yours must be equivalent from each. Naturally, some lenders could perhaps work with their very own scoring methods also.
There’s only one place in which you are able to get your FICO score from all 3 bureaus and that’s at http://www.myfico.com. If you purchase your credit score from elsewhere, once more be mindful that these scores are “FAKOs” (or “fake”) and could differ considerably from your FICO credit scores.
Adding to the confusion will be the credit bureaus themselves. Of late, Experian discovered the national average credit score of its customers is 678. This is very misleading to the standard consumer. Whenever you buy the credit report of yours as well as score straight from Experians internet site, you’re getting the things they call the “PLUS Score,” which isn’t a FICO score, and isn’t worn by lenders anywhere. (Equifax could be the exception–you can purchase your FICO score directly from them at their website; however, the only area to get all three scores together is at http://www.myfico.com.) The 678 PLUS Score found by Experian is in fact the average of consumers’ PLUS Scores, not the FICO Scores of theirs.
Plainly, the PLUS Score (and most Non-FICO scores) are useless. Not just that, but some hype misleads consumers into purchasing their PLUS Score assuming that they are getting the same credit score that their lender will use. non FICO scores are worthless not matter what the credit bureaus or any website marketing non-FICO scores claim. Actually a couple of points impact on the credit score of yours can mean confronting the reality of the loss of a huge number of dollars out of your pocket–a loss that you probably didn’t plan for. The next time you want the best precise credit rating offered, do yourself a favor for the industry standard: the FICO credit score.