Credit Scores – Credit Reports – The Hidden Secrets

While there could be several ways you might determine your credit score, using several different scales, the only one that matters today is the FICO score. This has become the regulated means by which lenders determine your eligibility for a loan. These scores are purchased by lending agencies from credit bureaus, which is why the bureaus are seeing such high success, especially the top three. Credit scores are viewed as very important today, by both lenders and consumers, and there before credit bureaus stay in business. Ironically, FICO scores are not the same ones that credit bureaus sell to consumers, only to lenders.

The Fair Isaac Corporation owns the scoring model for FICO and allows credit bureaus to use it. Credit bureaus use the model in combination with consumer data and sell the ensuing scores to lenders. The top three bureaus call their scores by different names. Oddly, they have very little in common with the FICO scores and can be extremely different. A divergence of up to 100 points is not uncommon. Therefore, following these scores is very ineffective when tracking the progress of your credit settlement. What is worse is the fact that consumers may feel confident about their credit scores until they purchase the true FICO score from a credit bureau and see that their rating is much lower than they anticipated.

Free Credit Reports

In 2003, an amendment was made to the Fair Credit Reporting Act (FCRA). Known as the Fair and Accurate Credit Transactions Act (FACTA), this amendment includes a provision that requires credit bureaus to supply consumers with a single free credit report once each year. This means you can get free credit reports from all three major credit bureaus on a 12-month basis. If you rotate your report requests, you can have an on-going and fairly accurate credit report every four months. The site you can visit to acquire information concerning this process is AnnualCreditReport.com.

As far as credit repair is concerned, however, these free credit reports have their flaws. Each bureau has a different report format that comes up short in being crystal clear. If your goal is credit negotiation, a better option for you could be a tri-merged report. What this does is combine the readings found by all three major bureaus into one easy-to-read report. Our services allow you to access such beneficial reports at a very low price that is well worth the clarity and accuracy you receive with the purchase of such a report. You can order one time without the inconvenience of ongoing membership fees.

Source by Eric Avenaim

Leave a Reply

Your email address will not be published. Required fields are marked *