Educational Credit Scores Examination
Educational Credit Scores Confuse Many
FICO rules the credit scoring world. Despite the best efforts of competitors it is used by over 90 percent of lenders.
Educational credit scores are those scores produced by credit reporting agencies and others that are little used by banks and credit card companies. FICO still commands over 90 per cent of the market. FICO scores run from 300-850. That is not to say that educational scores are useless. They use much of the same information that FICO uses. They just crunch the numbers that go into the final score in different ways. Here is some basic information about educational credit scores.
UPDATE: National Mortgage News reported in September of 2014 that Fannie Mae and Freddie Mac are studying possible use of the latest versions of Vantage 3.0 and FICO 9 for future mortgages. Expect this to take considerable time before being implemented if it ever is. Current strict standards are considered by many to be unfair to minorities, the disabled and other protected groups.
Six Educational Scores
- Plus Score: The Plus Score was created and is sold by the Experian credit reporting agency. Plus Scores measure between 330-830
- TransRisk New Account Score: Credit Reporting Agency TransUnion created this to rate and predict the risk on new accounts. This does not apply to existing accounts according to thw Consumer Financial Protection Bureau. Range is 100-900.
- Equifax Credit Score: This is the proprietary educational score created by credit reporting agency Equifax. They claim to use information from all 3 credit bureaus. Range is 280-850.
- Vantage Score: Developed by the big 3 credit reporting agencies. Vantage has been claiming for years to be catching up to FICO but there is little evidence of any educational credit scores doing that. It has had 3 incarnations.
- Vantage 1.0. Range 501-990
- Vantage 2.0 Range 501-990
- Vantage 3.0 Range 300-850
- CreditXpert: This score is provided to companies that provide consumers with credit monitoring services. This score is frequently used by lenders to help identify ways for consumers to improve their credit scores. Range is 350-850
- CE Credit Score: Little used by lenders other than Community Empower and iQualifier.com. Free to consumers. Range 350-850.
How are Educational Credit Scores Different From FICO Scores?
There are so many moving parts it’s hard to say just how different the “Educational Credit Score” number will be from the FICO score. Many times it is somewhat close, but not always. For instance I’ve notice that the CreditXpert score doesn’t seem to take age of accounts into consideration. Another obvious difference is that they all seem to count negative weight towards inquiries that are over a year old. FICO drops all measurement of inquiries after one year. No credit scoring companies are at all open about the actual architecture of their scoring process. Bottom line? You will have to pay FICO to get their generic score. Remember the FICO score bought by lenders will probably differ from the one you get. Just like Coca Cola…you can figure out most of it and infer most of the rest but there will always be a factor of uncertainty in the end.