FICO Score Variations Tailored 49 Ways
FICO Score Variations Total 49
FICO Score Variations go beyond the blunt instrument many people think they are. Many people are aware that there is a FICO Auto score available for car dealers that specifically measures things of particular importance to the Vehicle lending industry. By this I mean that auto lenders are more concerned with any repossessions you may have in your history. Are you more likely to make car payments than other payments if you find yourself in a financial squeeze? Your mortgage lender likewise is more interested in negative entries on previous mortgages than anything else.
The score they get from FICO may differ somewhat from the one you get for yourself when you pull your own FICO score. This will not usually be by a great amount. Unfortunately you can’t find out the auto score yourself because FICO will only sell this to auto dealers who pay extra for it. Vehicles are not the only FICO Score variations that FICO offers.
Mortgages Have Different FICO Score Variations Than Cars or Credit Cards
Mortgage credit scores come in a bewildering variety of flavors. A recent Real Estate Tri-Merge report shows TransUnion using “FICO Risk Score, Classic (04)”, Range 309-839. Experian uses “Fair Isaac (v2), Range 320-844 and Equifax uses “Beacon 5.0” Range 334-818. These actual scores vary by a range of 22 points. That is a significant variation that can kill a deal for a consumer on the wrong end of it. At the very least it’s enough to risk throwing you into a risk category that pays higher interest. Many, if not most, people think that the FICO range is 300-850 and that’s it. Had this person applied for an Auto loan it would have been different in still another way. Had it been an application for a credit card it would have been yet another figure. Even the most careful consumer is going in blind to a certain extent when applying for a loan.
Consider this fact. Merrick bank offers low limit credit cards for consumers with marginal credit scores. They have just issued a new feature involving free monthly FICO scores for its card holders. The devil is in the details. When the fine print on their web site is examined what they are offering is specifically the FICO 8 “Bankcard Score”. This differentiates this score from the “auto” score or the “mortgage” score. Beyond that it goes on to say that this particular score range is 250-900! And you thought it was written in stone that the FICO range was always 300-850.
What can a Consumer do about FICO Score Variations?
A consumer can do nothing about FICO Score Variations that are furnished to different categories of money lenders. FICO justifies furnishing different credit scores to lenders that are not available to consumers by falling back on the old alibi that consumers must be kept in the dark to some extent to prevent excessive “gaming the system.” FICO’s credit measuring criteria are well known to a certain degree but there is a curtain drawn around details they choose to protect their proprietary information. I like to call this their “secret sauce.”
Consumer Financial Protection Bureau has New Study of FICO Score Variations
The Consumer Financial Protection Bureau has released a new study confirming that credit reporting agencies use different models and choose different financial data for consumers than for banks and other creditors. Apparently this is the way the system will stay for the foreseeable future. Your credit reports are free once a year but even your basic FICO score is not free. Unfortunately your basic FICO score is not the score your lender will be measuring you by. Instead you will be measured by one of the 49 FICO Score Variations.
FICO “Transaction Score” and “FICO Bankruptcy Score”
Before we sign off on this Essay, as the Sham Wow guy says…”but wait there’s still more!” FICO has a “Bankruptcy Score” for those merchants who want to pay for it. This score measures factors in the individual consumer’s behavior that statistically lead into bankruptcy. They are very secretive about this one to avoid the possibility of consumers gaming the results. Another interesting boutique type of FICO score is the “FICO Transaction Score.” This measures money trouble type behavior. High on the list of what they consider questionable behavior is excessive cash advances from your credit cards. A flurry of credit Inquiries will also get you in trouble here. Needless to say over limit statements on credit cards will get their attention here.