What is the difference between these two scores? Are there two seperate algorithms? I've spoken to reps from two different financial loan institutions, and they've assured me that there IS a difference between your FICO socre and your Beacon score.. hmmm... jmart
Beacon score is equifax own private scoring system. Definitely different from Fair Isaac: http://www.creditnet.com/Credit_Services/Credit_Monitoring/Equifax_Credit_Products.php
Okay, I am really confused I always thought that Beacon was a Fair Issac score, Emperica was the TU version from Fair Issac, and Experian's Fair Issac, was also Fair Issac. Am I wrong? Dani
Dani.... Yes and no. The Beacon (and the others) is Equifax's customized FICO. FICO is generic and the basis for the Beacon and other scores.
Well, I found this is the FAQ section on myfico.com: What do I get when I order Score Power? You receive a package of information including your BEACON/FICO score, the Equifax Credit Profileâ?¢ on which your score was calculated, and a personalized analysis of your score. Will ordering cause my FICO score to drop? No. Ordering your own Equifax Credit Profile and BEACON/FICO score through this service will not change your score. Which credit reporting agency should I select? While all three major credit-reporting agencies offer FICO scores for making credit decisions, only the BEACON score from Equifax is available for purchase by consumers. So, they are saying that their score is your BEACON score.
Q "What is the difference between these two scores? Are there two separate algorithms? I've spoken to reps from two different financial loan institutions, and they've assured me that there IS a difference between your FICO score and your Beacon score.. hmmm..." FICO is short for Fair Isaac and co. This company creates credit risk models. Fact: Most basic credit scores are what is termed a FICO score. Only scores that takes the following criteria into account are considered FICO scores. http://www.myfico.com/MyFICO/CreditCentral/ScoreConsiders/FICOFactors.htm Also consider that FICO scores ignore things like having a job, how much you make and your age. See http://www.myfico.com/MyFICO/CreditCentral/ScoringWorks/FICOIgnores.htm Now there are many versions of FICO scores and there are several basic types. The three major types are: 1 FICO (used with credit cards). 2 Bankruptcy (used for mortgages and auto loans). 3 Profitability (used to see if they can make money off of you). Weed out the free riders. Now there are three major credit bureaus and they all sell credit scores to consumers and lenders: CRA name------Consumer score name---------------------Lender score name Equifax------------Beacon/FICO score---------------------------Beacon Experian----------Experian credit score-------------------------Experian/Fair Isaac Risk Model score TransUnion------Trans Union personal credit score---------Empirica score Now a real FICO score uses a scale from 300 to 850 where 661 or 681 is very good and great respectively. When a lender pulls a FICO report they get a FICO score on this scale that has a name that varies depending on what bureau they pull from. Each CRA sells 12-15 different kinds of credit scores. Equifax's personal credit score is the same as the one they sell to lenders. TransUnion sells consumers a score on a scale of 150 to 934. Equifax sells consumers a score on a scale of 340 to 820. Now if this is not complex enough, Fair Isaac could sell a mortgage company a risk score that would fall into the bankruptcy type. This would technically not be called a FICO score even though it came from Fair Isaac. This type is used to see the odds that you will declare bankruptcy and is used in applying for a mortgage. They usually pull all three of your FICO scores first and take the middle number. Then they plug in the data you give them about income, debt ratios Etc. To make things even more complex, some lenders such as auto dealers are using older FICO credit scores on potential borrowers in conjunction with other data to come up with a number that means something to them and nothing to the rest of the world. With all the complexities of credit scoring don't be surpassed if the average credit rep is clue-less as to what is actually going on.
This is a hall of fame post. Well said. I think the problem that we all have is that we lose sight of the importance of the underlying information and focus too much on the "score". Since we don't know what "score" any potential lender is going to see, everyone should focus on the basics that make up any score model such as: Payment history, lates, derogs, bk etc.. Credit usage d/i ratios Number of inquiries Age of accounts If you focus on these factors and worry less about your "score" you'll get the credit you want or need. Get rid of your "baddies" don't max out your CC's and the battle is more than half won.
Where have you seen info on a profitability score? I know that many CC companies have their own internal scoring, but does FICO actually sell a model that calculates profitability? That would be the greatest irony (among many) of credit scoring. You finally reach the holy grail (800s across the board) but nobody wants you because you won't make them any money.
There is very little information available on profitability scores but, it is used by credit card companies to determine which credit card customers are the most profitable. When you call up to lower your interest rate or ask for a line increase, it is this type of scoring that comes into play. Credit card companies have two major ways to make money of off you: One: Merchant fees: The more money you move through a account, the more money they make from the merchants. Two: Fees. If you carry a big balance, pay late twice a year, and occasionally go over your limit, they make a lot of money of you from fees. I am not encouraging anyone to throw money away to get a higher profitability score. I am just saying this is some of what they look at. They also have to figure in risk and this is where your FICO score comes in. If your score is good, then they figure the odds of you defaulting are small so even if you are not terribly profitable they will tolerate you.
So you're telling me that NO score that I've seen is my TRUE FICO? The MyFico.com site, and Equifax's score is not the ACTUAL FICO, but a Beacon Score, which is Equifax's flavor of FICO? Amazing.. jmart
At least you guys have a Fico/Beacon score. I got rid everything on my EQ report except for new items. So new in fact that I can't get anyone to approve me for credit using my EQ report because they can't generate a score for another month (Need 6 months of open credit to generate score), since everything I have was opened Nov/Dec 01 it hasn't been 6 months yet. I have a ton of inquiries and EQ sends me the same form each time I dispute them telling me they are a factual record and cannot be removed. Total BS, but hey I'll send an intent to sue letter (some of them are really inaccurate and some of them were from when I bought my new car in Dec and the dealer let everyone and their mother pull a report on me that I didn't authorize, I told them they could only pull 1, they let others pull 6+ more). So don't fret, you have a score and at least get denied for it. I get denied because I have no score to consider..
A FICO score is a generic term for a type of score. Fair Isaac makes the models and sells the software to the three major credit bureaus. What I was trying to say is that of the three scores you can purchase yourself, the one from http://www.myfico.com or http://www.equifax.com which is the same score, is the same FICO score that lenders see. So if you purchase this one score it will tell you where you stand in terms of what is in your Equifax credit file. If your other two credit files, TransUnion & Experian, have the same date, that score will give you a idea of where you stand in general. Have fun.
I just tested this today. I have two Citi accounts. One is the Citi Plat Select (Card A) and the other is Citi AA World Plat (Card B) Both cards, A and B were opened within just a few days of each other last year. Card A has had a balance paying down during BT promo # 0% interest which just ran out last month. No purchases have EVER been placed on this card so far. Card B has NEVER carried a balance - always paid in full each month using AutoPay. Move LOTS of purchases thru this card each month averaging $2000 give or take. Large payments of course because they equal the usage or purchases amount. I asked for a lower APR on Card A - answer NO I asked for a BT offer on Card A - answer NO I asked for a lower APR on Card B - yes - by 1% point I asked for a BT rate on Card B - yes, 4.99% Mist
Saar, Yes it does but I don't plan to pay it. If they won't waive it come July I plan to try to combine it with my Citi Select or close it altogether. Are you saying that is why I don't get ANY offers for BT's or lower APR's from my Citi Select...because I don't pay an annual fee? I don't think that's the reason at all. I think it's because I haven't used it for purchases along with it having been at 0 finance chrgs for 9 months - they haven't made any money off of me. The AAdvantage has made 1 $85 annual fee along with 16000 +- purchases (all paid in full each month) since inception so they are collecting their merchant fees.
They mentioned the profitability score as one factor in a company's retention policy. They naturally have a bigger incentive to retain a customer who pays an annual fee. Still, if your revolving account is profitable enough, then once your speak w/ "R", they would offer you a lower APR. Saar
