Credit Scores (FICO Score) And Credit Reports – 9 Common Misunderstandings
Misconception #1: Credit scores as well as reports are managed by the government. – False
Fact: Credit scores as well as reports are controlled by laws like any other business but are usually not directly managed or handled by the government. The 3 credit bureaus (Experian, Equifax, and Transunion) are companies which collect info about people to be able to package and market it to various other businesses.
Misconception #2: Credit scores are one more element of the credit report. – False
Fact: Credit scores aren’t part of the credit report; they’re generated from the information in the report. It is a subtle but distinction which is important.
Misconception #3: I’ve one credit report as well as one credit score. – False
Fact: You have three separate credit reports and identity has been stolen three distinct scores depending on those reports. Most of the three credit bureaus keep the own credit report of theirs about you. They pretty much all calculate your score based upon their version of your report, and they all estimate the score a little differently. Your score can conveniently be a fifty to 100 points different from one bureau to the subsequent.
Misconception #4: Credit accounts are computerized, hence they must be correct. – False
Fact: Credit reports aren’t perfect. There’s no central computer that all the banks and credit cards are connected to. If perhaps you owe money to an enterprise, they can report your payment history to one, almost all, or maybe none of the 3 credit bureaus, and mistakes do happen. Based on the US Public Interest Research Group, so many as 25 % of credit reports have important mistakes.