I live in Georgia, so I am entitled to two free credit reports from each credit bureau each year. Today, I pulled online credit reports and credit scores for both myself and my husband. I have been working for almost one year now to get all of the errors cleaned off our credit reports (there was a lot of work on my huband's due to his exwife that has very poor credit and a boatload of delinquincies). Anyway, TU's score explanation says that the minimum=150 and the maximum=934. Our scores are 715 & 782. Can anyone tell me how the TU Online Scores equate to FICO scores? I thought the maximum FICO score was 820. We are going to buy a new car in about 60 days and I want to make sure that we have the strongest credit possible when we arrange financing. Also, if anyone knows what the minimum score thresholds are to qualify for the best auto loan rates, I'd appreciate that information too.
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.
Thanks for your thorough response Erik. You better believe that I'll be leaning over the desk when we apply for our auto loan to see what kind of report is used and how the scores compare to what I've been able to obtain as a consumer. We will most likely finance through our local credit union unless the dealer can offer a better deal.
Credit unions are definitely your best bet. When looking for an automobile, especially a new one, do not mention how you are going to finance it until you decide what you want and they tell you the cost will be. Good luck.
