The Fair Isaac Corporation created the credit scoring system that is commonly used in the lending industry today. Your FICO score is one of the most important numbers in your life as it can affect interest rates, loan approvals and even rental deposits. If you want to access your FICO score, you will most likely have to pay something to see it.
Credit Score vs. Credit Report
When you pay your bills, open or close accounts or do anything else in your financial life, chances are the information will be reported to the credit bureaus. Credit bureaus use this information to compile a credit report on you. The information in your credit report is used to calculate your credit score. While your credit score is based on your credit report, it does not necessarily come with your credit report. You can get a copy of your credit report without it saying anything about your credit score.
Credit Score Calculation
Your credit score is calculated using information off of your credit report. The formula for the FICO score is weighted towards certain factors. For instance, 35 percent of your FICO score is tied to your payment history. If you pay your bills on time, this boosts this portion of your score. Another 30 percent of your score is based on the amount of debt that you have while 15 percent is the length of your credit history. The amount of new credit that you have and your credit mix make up 10 percent each of your score.
Paying for FICO Score
Although your FICO score does not come with your credit report, you can pay to see it by If you want to see a copy of your FICO score, you can go to the Fair Isaac website. On the website, you can choose from a number of different credit score and credit report packages. For example, you can pay for the FICO standard package which entitles you to one credit report and credit score from the credit bureau of your choice.
Discrepencies
When you pay for your FICO score, you will see a score that is calculated with the help of the basic FICO formula from credit bureau information. The credit score that you see may not necessarily be the same exact score that mortgage or auto lenders see. Credit scores are calculated using different formulas and in some cases, the scores you see may be higher than what the lender sees. This is part of the nature of the credit scoring system and you have to simply use the information to the best of your ability when you receive it.
0 comments:
Post a Comment