Credit Information

Credit Education

  • The Different Scores
    • Equifax Credit Score – Some Credit Monitoring companies use different scores.
    • What is the difference between the Equifax Credit Score™ and the FICO® Score?
  • Both the Equifax Credit Score and the FICO Score are general-purpose score models used to predict credit risk. The Equifax Credit Score is a proprietary model created by Equifax.  The FICO Score is a proprietary model created by Fair Isaac Corporation (FICO) .  All Equifax consumer services and tools make use of the Equifax Credit Score unless otherwise indicated.
  • The Equifax Credit Score uses a numerical range of 280 to 850, where higher scores indicate lower credit risk. The FICO Score uses a numerical range of 300 to 850, where higher scores also indicate lower credit risk.
  • The Equifax Credit Score can be used to calculate a score for not only your Equifax credit file, but also your Experian and TransUnion credit files. This gives you the ability to compare your credit scores across all three credit reporting agencies, which can be useful in understanding your credit.
  • Though both score models predict similar types of risk, it is important to remember that because they were created independently by separate companies, they should not be expected to deliver identical scores. In some cases, an Equifax Credit Score and a FICO Score calculated at the same point in time may be similar.  However, in some scenarios the scores may differ, perhaps significantly, based on how the different models calculate risk.

FICO CREDIT SCORE– Your Fico Score or Fair Isaac Corporation

From MyFico.com

About FICO® Scores

  • The most widely used credit scores are FICO® Scores, the credit scores created by Fair Isaac Corporation. 90% of top lenders use FICO® Scores to help them make billions of credit-related decisions every year. FICO® Scores are calculated based solely on information in consumer credit reports maintained at the credit reporting agencies.
  • By comparing this information to the patterns in hundreds of thousands of past credit reports, FICO® Scores estimate your level of future credit risk.

What is a good credit score?

  • Base FICO® Scores have a 300-850 score range. The higher the score, the lower the risk. But no score says whether a specific individual will be a “good” or “bad” customer.
  • While many lenders use FICO® Scores to help them make lending decisions, each lender has its own strategy, including the level of risk it finds acceptable for a given credit product. There is no single “cutoff score” used by all lenders and there are many additional factors that lenders use to determine your actual interest rates.
  • What’s in my FICO® Scores
  • How to improve my FICO® Scores
  • Reasons for your credit score
  • When a FICO® Score is calculated from your credit report, the credit reporting agency will also provide up to five reasons that are most heavily influencing that particular score. These reasons are usually negative, because they are the reasons why the credit score isn’t higher.
  • The minimum required to calculate a FICO® Score
  • For a FICO® Score to be calculated, your credit report from the bureau for which the score is being calculated must contain enough information – and enough recent information – on which to base a credit score. Generally, that means you must have at least one account that has been open for six months or longer, and at least one account that has been reported to the credit bureau within the last six months.
  • What are the minimum requirements to have a FICO® Score?
  • FICO® Scores at each credit bureau
  • You have FICO® Scores for each of the three credit bureaus: Equifax, TransUnion and Experian. Each FICO® Score is based on information the credit bureau keeps on file about you.
  • FICO® Scores from each credit bureau consider only the data in your credit reports at that bureau. Your credit scores may be different at each of the credit bureaus. If your current scores from the credit bureaus are different, it’s probably because the information those bureaus have on you differs.
  • Why are my scores different for the 3 credit bureaus?
  • Your FICO® Scores will change over time
  • As the information in your credit report changes, so will any new credit score based on your credit report. So your FICO® Scores from a month ago are probably not the same score a lender would get from the credit bureau today.
  • Do FICO® Scores change that much over time?
  • Other credit scores
  • While FICO® Scores are used by 90% of top lenders, there are other credit scores made available to consumers. Other credit scores may evaluate your credit report differently than FICO® Scores. When purchasing a credit score for yourself, most experts recommend getting a FICO® Score, as FICO® Scores are used in 90% of lending decisions.

VantageScore

From Wikipedia, the free encyclopedia

VantageScore is a consumer credit-scoring model, created through a joint venture of the three major credit bureaus (Equifax, Experian, and TransUnion). The model is managed and maintained by an independent company, VantageScore Solutions, LLC, that was formed in 2006 and is jointly owned by the three bureaus.

VantageScore models compete with the credit scoring models produced by Fair Isaac Corp. FICO. Like the models developed by FICO, VantageScore models operate on data stored in the consumer credit files maintained by the three national credit bureaus. VantageScore models and FICO models use statistical analysis on those data to predict the likelihood a consumer will default on a loan. VantageScore and FICO models represent risk of loan default in the form of three-digit scores, with higher scores indicating lower risk. VantageScore and FICO use different, proprietary analytical methods, and scores from one system cannot be translated into one from the other.

VantageScore vs FICO score

VantageScore and FICO are developers of competing credit scoring models. FICO, the original creator of the FICO Score, was not involved with the creation of VantageScore’sformula.

VantageScore, FICO and the credit bureaus have allowed the public to know some information about the credit score categories and the corresponding calculation weights. FICO allows consumers to get their generic or classic FICO score for Experian, TransUnion, and Equifax from myFICO website. Consumers can get their VantageScores from free credit report websites, and TransUnion and Experian offer VantageScores to consumers for a fee through their websites.

In contrast with FICO’s credit scoring models, which are custom-built for each of the three national credit bureaus, to accommodate structural differences in the bureaus’ databases, VantageScore model design allows a single model to operate on all three bureaus’ data. VantageScore Solutions holds several patents on processes that ensure pieces of data within each bureau’s consumer database will be treated identically, regardless of differences in database structure. These methods eliminate much, but not all, discrepancy in VantageScore scores obtained at the same time from different credit bureaus. Some variation is unavoidable because factors such as the timing of lenders’ payment-information reports can mean the contents of a given consumer’s credit file will differ somewhat at each of the three credit bureaus.

The first two VantageScoremodels (VantageScore 1.0, issued in 2006, and VantageScore 2.0, released in 2010) used a scale range of 501 to 990, and assigned letter grades to various bands within that range, according to TransUnion:

A: 900–990

B: 800–899

C: 700–799

D: 600–699

F: 501–599

VantageScore 3.0, the version of the model released in 2013, adopted a scale of 300 to 850. VantageScore attributed the change, which matches the scale range used by FICO models, to the fact that consumers were more familiar with it than with the original VantageScore range, and because a 300-850 scale would make it easier for lenders to incorporate the VantageScore into automated systems.

VantageScore 4.0 was released in mid-2017, and contains many updates from 3.0. For example, version 4.0 weights medical accounts reported “in collection” less heavily than non-medical collection accounts. Paid collection accounts of any type are not factored into the score; this is a major difference from FICO, since most versions of FICO count any collection account into the score, paid or unpaid. VantageScore 4.0 also looks at trended data provided by the credit bureau from which the score is calculated, and examines a consumer’s credit utilization rates over time. This is a major development in credit scores since other models to date (including older versions of VantageScore and all existing versions of FICO) only examine the most recently-reported billing cycle. So, for example, if a consumer’s credit card often reports at or near the credit limit, but the consumer paid his/her balance recently and it now reflects a $0 balance, most credit scores would look only at the current $0 balance when calculating utilization rates. However, the makers of VantageScore 4.0 believe it is more accurate to look at the consumer’s utilization rates over a period of time. This may help or hurt a consumer, depending on their situation. A consumer who has historically used very little of their credit but makes a large one-time purchase and shows a high balance at the time the score is calculated would score better under VantageScore 4.0 than, say, FICO 8, which looks only at the most current billing cycle information.

How Scores Are Calculated

Your Credit Score is Compiled Up of

Payment history (35%)

  • The first thing any lender wants to know is whether you’ve paid past credit accounts on time. This helps a lender figure out the amount of risk it will take on when extending credit. This is one of the most important factors in a FICO® Score.
  • Be sure to keep your accounts in good standing to build a healthy history.

Amounts owed (30%)

  • Having credit accounts and owing money on them does not necessarily mean you are a high-risk borrower with a low FICO® Score. However, if you are using a lot of your available credit, this may indicate that you are overextended-and banks can interpret this to mean that you are at a higher risk of defaulting.

Length of credit history (15%)

  • In general, a longer credit history will increase your FICO® Scores. However, even people who haven’t been using credit long may have high FICO Scores, depending on how the rest of their credit report looks.
  • Your FICO® Scores take into account:
  • how long your credit accounts have been established, including the age of your oldest account, the age of your newest account and an average age of all your accounts
  • how long specific credit accounts have been established
  • how long it has been since you used certain accounts

Credit mix (10%)

  • FICO® Scores will consider your mix of credit cards, retail accounts, installment loans, finance company accounts and mortgage loans. Don’t worry, it’s not necessary to have one of each.

New credit (10%)

  • Research shows that opening several credit accounts in a short period of time represents a greater risk-especially for people who don’t have a long credit history. If you can avoid it, try not to open too many accounts too rapidly.
  • Let Us Help You. Please Fill In The Form Below.

  • This field is for validation purposes and should be left unchanged.