Credit score to you may differ from lender’s version

Credit Score to you

Credit History (Photo credit: LendingMemo)

Credit Score to You May Differ From Lender’s Version

UPDATE;  You can now buy your “auto enhanced score” and your “Real Estate Score” directly from FICO at their website.

FICO‘s credit score to you may differ from lender’s version.  FICO has dozens of “boutique” credit scores tailored to different industries.  Some industries care about certain types of data more than other industries do.  For instance your FICO “auto enhanced score” may be a different score than the credit card company receives.  Auto dealers naturally want to know if you favor making car payments on time over other debts.  Have you ever had a repossession?  If so it will send your auto enhanced score spiraling down.   The basics of good credit scoring remain the same.  Good recent payment history on all your bills and low debt to available credit ratio are where good credit scoring begins.

There are other interesting specialized FICO scores that will help you understand why a credit score to you may differ from lender’s version.  Here are 2 examples:

The FICO Liquid Credit Score weaves together elements of your business and financial credit worthiness.  It is used by some industries to make instant credit decisions according to their own values.  The FICO Expansion Score is used to evaluate the people who are outside of the system because they have no bank account, never had credit or other reasons.  These people are also known as “credit invisibles.”

Consumers can’t Get “Boutique Credit Scores”

The new Consumer Financial Protection Bureau has released a new study showing that credit reporting agencies use different models and choose different financial data to furnish to consumers as compared to banks and other creditors.  Expect more consumer friendly policies on access to that information in the near future.

Usually the Scores are not that Different we Hope…but

The report states that “given this complexity, it is unlikely that a consumer will often be able to know the exact score that a particular lender will use to evaluate them.”  The study goes on to conclude that consumers are sometimes left in the dark about the true quality of their credit.  Since lenders use plateaus or buckets to separate their categories, a single point is potentially very costly.  This is why we strive for the highest possible score we can achieve.  OK is never good enough when it comes to credit scoring because there is always a certain amount of uncertainty involved.  After a FICO score reaches 760 further increases don’t matter much except as a safety valve.

Why Can’t the Consumer get the boutique score?

The problem stems from the use of different models and different information.  Credit reporting agencies justify why the credit score to you may differ from the lender’s version by falling back on the old “for educational purpose only” excuse.  Most of the factors that go into the composition of credit scores are known, but each agency retains a small percentage of proprietary information as their “secret sauce.”  They claim this is to prevent consumers from “gaming” the system.  This is why the credit score to you may differ from the lender’s version.

Equifax, Experian and TransUnion must furnish one free credit report a year but they don’t have to furnish the actual score for free.  Your basic FICO score can be purchased from FICO.com for a fee.  You can purchase all 3 scores or just 1 if you wish.  Some credit card companies are providing a version of your FICO score as an additional service.

Pull your generic credit score before shopping for car and compare the two.  It could help you bargain!

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After practicing law for 37 years Edward F. St. Onge, Sr. now devotes all his time to helping consumers achieve a high credit score with amazing speed. Learn the counter-intuitive secrets to credit scoring through his down to earth instructions backed by extensive knowledge of the laws and trends. All of the latest tricks and techniques that they don't want you to know now at your disposal. At last a level playing field for the consumer!

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