A credit score lesson?

To make it brief and to the point, only Equifax offers FICO scores to consumers at this time. FICO scores are what the lender sees in most cases. Other scores that are not FICO scores are just tools and do not represent what the lender sees in most cases.

 

A little less brief and to the point....

Beacon score is the FICO score derived from equifax report... the score you get from say Experian via Credt Expert is non-FICO. ( now that consumers can get there "Beacon score" there are many new "NextGen score" for lenders to consider from FICO.

also.....

"When you apply for credit your score does not come directly from FICO. Instead each bureau has its own version of the rating system with its own name.


Equifax is called Beacon

Trans Union is Empirica

Experian is Experian/Fair Issac"


from here:

<http://pre-approvedcredit.com/sys-tmpl/understandcreport/>

 

dm4x -

It's confusing. Let me take a stab at it...

1) Credit Score is an algorithm assigning points to various characteristics on your credit report. Some of the things they look at are
- # of accounts
- Date accounts opened
- % of balance vs. limit
- Type of account (retail store, bank card, finance company, mortgage, revolving)
- # inquiries in last 2 years
- Timeliness of payments
- Derogatory information (or lack of)

2) The company that patented scoring is Fair Isaac & Co. - FICO.

3) All three credit bureaus license this technology and sell the resulting scores - TU = Empirica, EX=Experian FICO, EQ=Beacon.

4) Creditors also license FICO technology and use it in their own systems (for authorizations, new account scoring, limit management, profitability profiling, risk-based pricing, etc.).

5) Service bureaus (folks who manage accounts for creditors - i.e. TSYS for Sears and FNANB, or FirstData for NextCard) also license FICO technology and sell the services to their clients

If you want a whole lot of info on scoring, go to

http://www.creditscoring.com

or

http://www.myfico.com/myfico/CreditCentral/ScoringWorks.asp

Good luck,
mj

 

Fico is an acronym that stands for Fair, Isaac Company:

< http://house-loans.com/fico.htm>


Understanding Credit Bureau (FICO) Scores;

<http://www.nccredit.com/understanding.html>


I believe most lenders etc. want you to be confused so you will pay more in interest and fees.

 

Here's some more info:

http://www.creditinfocenter.com/creditreports/scoring/

 

NOT TRUE... Not all credit scores are FICO scores. FICO produces scores for Experian, EQuifax and TransUnion, but worthknowing.com, creditexpert.com and serval other sites have "scores" that are not FICO. To make matters worse, TransUnion supplies a score with their credit reports now, but it is NOT the FICO Trans Union score.

Unless you have a lender pull a report, the only access the consumer has to their "FICO CREDIT SCORE" is through myfico.com which bases the number on the information in your Equifax file.

 

I thought I made it simple when I said ONLY Equifax offers a FICO score to consumers which is what most lenders see. I guess that was too simple

 

So if this is the case, I still don't know my fico score. I only know my TU score. Where does the TU score usually stack up against the fico score? Lower or higher?

 

In my case...TRANSUNION was higher...

 

My TU score was 633. Equifax was 614.

 

CAMove-

You have lots of scores-

All bureaus use Fico technology, but all 3 will come up with a different #.

Lenders also use Fico technology, but in different ways - CapitalOne runs a profitability score on you, Bank of America runs a monthly "bankruptcy predictor" score, MBNA runs a profitability predictor score... when Ford pulls your credit report, they use an auto lender scorecard, and when Verizon does it, it's a cell phone provider scorecard.

Now to really muck it up -- different lenders treat the scores differently. Having an Experian 650 may get
you a Citibank card, but not an Amex Blue.

If you apply for a mortgage, the lender will normally run a 3-bureau merged report, and will use the 2 lowest scores.

So, do you ever see the score your lender sees? Only if you ask the lender to show it to you.

Not that it matters much - consumers aren't supposed to be able to better their scores (that's why we never saw them until last year - FICO's license banned their disclosure to consumers). Only when FICO was confortable that it was so utterly confusing (and the bureaus could make some $$ on it) did they start allowing disclosure.

-mj

 

My TU is 698. My Experian (through creditexpert) is 666. My worthknowing is 50.

 

ALSO-

to add a little more to your lesson, your BEACON score (and the others also have a similar method) can actually be any on of FOUR different scores, depending on who asks for it.

At any one time, you have FOUR BEACON scores...

- One for "Auto Finance"
- One for "Bankcard"
- One for "Installment"
- One for "Personal Finance"

Each one is geared with a 'higher emphasis' on the type of financing you are applying for.

This is a reason our scores seem to 'jump' around a lot depending on who pulls them- well, one of the reasons anyway.

Be careful, I think that if anyone was to completely understand the whole process at once, they would 'simultaneously combust'

Hope this helps!

Shawn

 

My head hurts.

 

Maybe this will help......



Two trains leave Moscow, one going 50 KPH and the other going 75 KPH. Train one is going West......






Now you know why they put us through all that in school, it was to prepare us for our credit reports!

"New" math isn't that bad, it's "Fico" math I have problems with!


Shawn

 

Where does the random number generator fit in....??

Oh, wait - I get it!!

 

CapitalOne runs a profitability score on you, Bank of America runs a monthly "bankruptcy predictor" score, MBNA runs a profitability predictor score... when Ford pulls your credit report, they use an auto lender scorecard, and when Verizon does it, it's a cell phone provider scorecard.

Now to really muck it up -- different lenders treat the scores differently. Having an Experian 650 may get
you a Citibank card, but not an Amex Blue.

MJ - Can you explain this further????