Kristy Annely asked:




The three major credit bureaus in the United States are Equifax (based in Atlanta), Experian (based in Costa Mesa, California), and TransUnion (based in Chicago). There are many credit monitoring services which help you to escape from being a victim of fraud by alerting you about the slight changes in your credit daily or weekly by referring to credit bureau reports.

The three credit bureaus differ in their processes of determining the credit score according to the retrieval of information, and report of information. The three major credit reporting agencies determine their own FICO (Fair Isaac & Co. Credit scoring) scores. But each of the agencies gives the scores a different name ? Equifax calls it the Beacon credit score, Experian making it as Experian/Fair, Isaac Risk Model and TransUnion calling as Empirica.

Experion credit report includes the financial behavior and identification information of a consumer. These reports can be obtained through your creditors, public records and other reliable sources. TransUnion credit reporting contains identifying information, items that may affect your creditworthiness, credit history or trade lines and inquiries. But it does not contain the details regarding medical histories, business accounts, and the major purchases that are paid in full.

Till the recent past, these three major credit bureaus had their own strategies and methodologies for making the credit report and rank consumers’ creditworthiness. But, now they have jointly adopted a new method called VantageScore system – a standardized formula. By this method, even though the credit scores remain different it will be easy for the consumers to understand the differences more readily than before. This will provide the consumers and businesses to have a highly predictive, consistent score. In general, apart from preventing identity theft, a credit reporting system can greatly reduce its impact by its service efforts.

Colleen

Kyle Gentile asked:




The first step to a good FICO score is to know you where you are at. Most people look for a way to obtain a free FICO score, but it can be tricky. There are a couple things to watch for when trying to obtain a free FICO score.

The first is when you look for a free online FICO score you are blasted with advertisements. There are so many companies looking to give you a free credit score. The true is all are not created equal. Fair Isaac developed the FICO score and it is used by ninety percent of the lenders in the country. Seeing the success of Fair Isaac, the credit bureaus decided getting into the credit score business could be profitable. Scores that are commonly offered, when you are looking to obtain a free FICO score, might not actually be a FICO score and one of these other scores. There is a hundred different way to score credit and only one is a FICO score. You just need to make sure it does say FICO and you should be safe.

The second, when trying to obtain a free FICO score, is offers that come along with the free fico score. The fact is it isn’t really free. Meaning, to obtain a free fico score, you will need to sign up for a credit monitoring program. These programs are usually free for the first month but after that you will be charged on a monthly basis.

The confusion comes from the fact Americans by law are entitled to one free credit report each year from each credit bureaus. This is does not state are entitled to obtain a free FICO score. Getting a credit score is relatively new. It was only 2003 when congress passed a law giving people the right to see their score. Before 2003, consumers were kept in the dark about their credit scores. Fair Isaac wanted to keep the score secret because they thought people would try different measures to influence their scores.

If you don’t want to sign up for credit monitoring program you will have to pay for a FICO score. Once again here make sure it does say FICO. If it doesn’t you run the risk of getting one of the other scoring models. If you still want to obtain a free FICO score you will have to sign up for one of these programs, but you do have the opportunity to cancel if you want. The first month is usually free.

Anita

thatblissguy asked:


I know that the calculations used by lenders for a mortgage differ from Fair Isaac (FICO). I have TrueCredit (by TransUnion) triple credit monitoring which gives me unlimited access to all three of my credit reports (TransUnion, Equifax, and Experian) AND my FICO scores. I am preparing myself for a refinance and I want to see how I am scoring with the mortgage calculation, since I have improved my scores significantly over the past year when I got my sub-prime mortgage. My one year prepay penalty is coming up in late December and I want to be fully prepared before I start shopping. Also, what ABSOLUTE MINIMUM credit scores do I need, (FICO) and (Mortgage Lender), to be considered for a Prime rate (<7.5%). Thanks for your help, the people that contribute are greatly appreciated and I'm honored for your time and efforts! Keep up the good work!!!
So I just figured out recently that TransUnion's TrueCredit scoring use FACO and not a true FICO. I went to each bureau seperately and got my FICO and heres what I found, its astounding:
TU EXP EQ
FACO: 637* 596 607
FICO: 637* 660 678

*TransUnion only offers this scoring

I was going off this FACO calculation for over a year! Come to find out I have pretty good credit, and the things I have done to improve it had paid off substantially more than I thought in the past! My Mortgage score was MUCH higher than my FICO when I was applying for my first mortgage. So I now feel that my MORTGAGE SCORE should be in the 700s? Does anyone agree with that? That a middle score of 660 FICO would be at least 700 in Mortgage credit scoring?

Beth

Mike Clover asked:


Credit Score being the doorway to financial health I thought I would give some tips on what to avoid so your credit score is not affected. If your credit score is currently low I guarantee that you are paying too much to your creditors. Any business that is in business for profit is looking for a reason to make money. If a creditor knows your credit scores are low they will charge you for it. The reason is because they can. Here is what to avoid so your creditworthiness is not affected.

Late Payments

This is one credit dink I see all the time. If you are late on a obligation that reports to the credit bureaus I assure you that your score will drop around 75 to 100 points. Timely payments account for 35% of your overall FICO score. This particular factor in your credit score is the biggest factor of all.

Amounted Owed

If you have credit card debt, and the balanced owed vs. the allowed credit limit is more than 30%, your score is affected. The amount owed accounts for 30% of your overall FICO score. You should keep your credit debt well below 30% of the allowed credit limit.

Length of Credit History

Once you are granted some credit the FICO score model looks at how long you have been in good standing with your credit. If you have a good history with your creditors, you can count on it helping your overall credit health. The length of your credit history accounts for 15% of your score.

Mix of Credit

Mix of credit accounts for 10% of your FICO score according to Fair Isaac. So you need credit cards, installment loans, auto loans, department store credit, etc…… The rule of thumb is to have at least 3 to 4 lines of different types of credit to get the best overall score.

New Credit

New credit accounts for 10% of your FICO score. The FICO score model does not like to see you applying for too much credit. Too many hard credit inquiries will affect your credit score. The rule of thumb is around 3 to 4 different types of credit.

Identity Theft & Credit Monitoring

Make sure you are pulling a copy of your free credit report regularly. With the identity theft problem it is recommended to set up some type of credit monitoring with immediate alerts. So if something happens you will know about it quickly.

Co-Signing

Co-signing is a big problem as well. We don’t recommend co-signing for anyone. If a family member or friend does not have the credit to buy, the best thing they can do to get credit established is to get a couple of secured credit cards. This is the fastest way to improved credit health. With a little history, usually 12 months of good payment history the creditors will open the doors of credit.



Richard