What's the Difference Between a Credit Score and a FICO Score?

Some people believe that a credit score and a Fair Issac Corporation (FICO) score is the same thing while others have never heard of a FICO score a day of their life. The three main credit bureaus, Equifax, Transunion and Experian each have their own credit score on your credit report. Each bureau is responsible for formulating their own way of calculating your credit score and none of the three bureaus do it the same way that is why it is not unusual to have different scores from different bureaus.

As you may or may not know FICO better known as the Fair Isaac Corporation is the method used by credit bureaus to measure your credit score. The FICO score is popular because it lets big businesses know how much of a risk a consumer is to a company very quickly, efficiently, and conveniently.

FICO is the leading measurement for credit bureaus. This system is used by most business institutions such as banks, credit card companies, and mortgage companies. Whenever a lender decides that they want to do business with you there is a really good chance that they are going to be using the FICO score to see whether or not you are even worth doing business with and / or if you even qualify for the loan in the first place. Do not worry if you do not have perfect credit because loans are like custom made suits: there is one in particular that fits everyone's needs.

All three credit bureaus have their own version of what a consumer's credit report should look like. For example, you can have scores above 600 or 700 on both Equifax and Experian but have a really bad score of 425 on Transunion. When you do decide to view your scores online it is of extreme importance that you are getting the Fair Issac Corporation version of your credit score as this is the one that will best represent your credit score in the financial and / or business market.

Source by Tony Banks

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