Borrower Beware – All Credit Scores Are not Alike
Not always so. The fact is there are several different credit scoring methods. Credit scores calculated out of the same credit reports can differ considerably from credit scoring strategy to credit scoring method. So how can you ever know what your credit score actually is? Well, fortunately, 75 % % of lenders employ FICO scores exclusively and also you can obtain FICO scores yourself–you merely have to know where you can go.
FICO credit scoring was designed by Fair Isaac and Company as a numerical way of determining your credit worthiness. The scores range between 300 and 850 and are basically based on your past bill paying performance.
It will be simple in case everyone used the scoring system, although three major credit bureaus each have the own version of theirs of the FICO score: Equifax makes use of the Beacon system, TransUnion utilizes the Empirica process, as well as Experian makes use of the Experian/Fair Isaac process.
Althought they each use somewhat different methods, all methods are based on the original FICO scoring strategy so generally your score should be equivalent from each. Naturally, some lenders might also work with their very own scoring methods too.
There’s only one place where you can get the FICO score of yours from all three bureaus and that’s at http://www.myfico.com. If perhaps you purchase your credit score from elsewhere, once again be aware that these scores are “FAKOs” (or perhaps “fake”) and also could differ substantially from the FICO credit scores of yours.
Contributing to the confusion will be the credit bureaus themselves. Of late, Experian discovered the national average credit score of the consumers of its is 678. This’s quite misleading to the normal consumer. If you buy the credit report of yours and score straight from Experians website, you’re getting whatever they call the “PLUS Score,” which isn’t a FICO score, plus isn’t used by lenders anywhere. (Equifax is the exception–you can buy your FICO score from them at the website of theirs; however, the only place to get all 3 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 their FICO Scores.
Plainly, the PLUS Score (and all Non-FICO scores) are useless. Not just , but certain hype misleads consumers into purchasing their PLUS Score thinking that they’re getting the same credit rating that their lender will use. non-FICO scores are worthless not matter what the credit bureaus or perhaps any site marketing non-FICO scores claim. Actually a few points impact on your credit score can suggest confronting the simple fact of the loss of thousands of dollars out of your pocket–a loss that you almost certainly didn’t plan for. The when you want the foremost correct credit score available, do yourself a favor and get the industry standard: the FICO credit score.