Important note concerning credit scores

poundwise · #1 (**permalink**) 05-30-2006, 02:52 PM

This may be common knowledge, however, I did not realize it until today:

A credit score is available from all three credit bureaus. However, only the score from Equifax is your actual FICO (Fair Issac) score. Experian and TransUnion offer their own quasi-score that they have developed as an add-on product for sale to consumers.

They are very careful in the wording of these offers. For example, Experian states that their score will allow you to, "See the same type of information that lenders and creditors see before you apply for credit..."

I believe this is just another example of shady dealing on the part of these companies.

Ima saver · #2 (**permalink**) 05-30-2006, 03:08 PM

I did not know that, only equifax really counts?

Ima saver · #3 (**permalink**) 05-30-2006, 03:17 PM

Great, that is the one I pulled.

Broken Arrow · #4 (**permalink**) 05-30-2006, 05:53 PM

Thank you for the bulletin. I will most definitely keep that in mind the next time I need a credit check.

#5 (**permalink**) 05-30-2006, 05:56 PM

well, they all "count" in that you never know which a particular lender is going to look at.

it actually breaks down to 5 credit scores (this of course is "pre" vantagescore)

you can get a FICO based score from all three, when you pull your report from MyFICO.com they will ask you which of the three you want them to use to calculate the score.

then, as Poundwise correctly points out, Experian and Transunion have their own score they generate off their own reports. Experian's scale goes to 830 and I believe Transunion's goes to about 950 making it difficult to do an apples to apples comparison, that is, an 830 while grand on the FICO model isn't quite so hot when using Transunion's system.

Equifax has apparently not seen it as cost effective to create their own scoring model so again, as Poundwise says, they just use FICO.

I for one no longer bother with the Experian and Transunion scores, I just go to MyFico and pull each on a rotating basis about every 4 months and my free report in the space in between, keeps my eyes on my report every other month. Probably not the wisest use of my money but I am a paranoid character and it only totals to $30 a year.

And for what it's worth, the vantagescore, when it gets rolling is only going to reduce the total to 4 (three versions from FICO and the vantagescore combo from the three sisters). I have heard as well that even the vantagescore might vary depending on which of the three you get THAT from due to the fact that they don't talk to each other much. But I'm not sure about that last part.

Broken Arrow · #6 (**permalink**) 05-30-2006, 06:14 PM

I thought VantageScore was suppose to standarize between them all!

What a pain in the rear.

#7 (**permalink**) 05-30-2006, 10:10 PM

no, it would be nice, but Fair Isaac isn't going anywhere anytime soon.

the credit bureaus just want a piece of the pie since Fair Isaac has pretty much cornered the market on making money off of credit scoring. they figure if they get together, it will at least leave only two sources for the score (with slight variations therein) and maybe they can get more lenders to contract with them instead of FI.

I haven't read as much about the vantagescore as I should have, do they intend to use the same scale -- topping at 850? I would imagine not since you would think they'd want to differentiate themselves, create that "gotta have both!" mentality.

sweeps · #8 (**permalink**) 05-31-2006, 04:32 AM

rexdart is right, it's going to be a long time before VantageScore replaces FICO, if it ever completely does. VantageScore will be on a different scale: 501 - 990. It roughly approximates the grades you would get in school:

901-990 equals "A" credit
801-900 equals "B" credit
701-800 equals "C" credit
601-700 equals "D" credit
501-600 equals "F" credit

More info at MoneyCentral

Writer@Large · #9 (**permalink**) 05-31-2006, 06:39 AM

Quote:

Originally Posted by Broken Arrow

I thought VantageScore was suppose to standarize between them all!

VantageScore standardizes the math they use to calculate the score. The actual info used to calculate will still fluctuate from institution to institution.

Consumer Reports on VantageScore

--W@L

poundwise · #10 (**permalink**) 05-31-2006, 07:47 AM

Don't be fooled. VantageScore is not a result of credit bureaus having an inate desire to make things clearer and better for the consumer. If you want to know the reason for VatangeScore you only have to look just after the term FICO. Just to the right of it, you'll see that little R with a circle; trademark.

Trademark defined: "A name, symbol, or other device identifying a product, officially registered and legally restricted to the use of the owner or manufacturer."

Meaning, of course, that the bureaus would have to license, share the pie, with Fair Issac in order to offer a standardized FICO score, something they would rather not do and the reason why we have three possible credit scores today.

While Equifax has an arrangment with Fair Isaac to utilize the FICO score in conjunction with its credit reporting, the other bureaus do not. And you can bet they, as well as Equifax, love the idea of having their own standardized figure with their own little R with a circle after it. It's all about ownership rights and money.

VantageScore, or some new system could, in fact, make things clearer, but it likely won't in practice because, as the previous poster mentioned, your score will likely still vary between all the bureaus.

The best thing for us would be if we could have one credit score drawn from information from all three bureaus. I believe that's what Fair Issac intended, ultimately, but it's not going to happen anytime soon.

As for the deceptive practices of these companies: When the Feds made credit bureaus offer one free credit report per year to consumers, they complied because that had to. Yet, at the same time, they created their own sites (like the deceptive freecreditreport.com), which has the appearance of being the means to obtain your free annual credit report but, in reality, is selling credit monitoring and packaging a 'free' credit report with that vieled offer. The REAL, mandated site where you can get copies of your free credit reports is annualcreditreport.com - a site/link that you will find difficult, if not impossible, to find on any of the bureaus' web sites.

We must pay attention to three bureaus and multiple credit scores and I'm not saying that you shouldn't, but the ultimate advice when dealing with such matters is to learn all you can about how the system works and keep your guard up when dealing with these organizations.

Dixiechick · #11 (**permalink**) 06-01-2006, 07:38 AM

I found Experian to be completely accurate on my credit information. Exquifax had several incorrect accounts and addresses along with misspelled name. I'm still working with them to correct these things. In another 4 months, I'm going to request a free report from TransUnion to compare info. I'm rotating all 3 companies out every 4 months...