Understanding your score is pretty simple, the higher the better. However what most people don't know is why the scores vary and why they are different from one place to the next. First a few fun facts that some know and some don't. FICO, which is what most banks use is not a credit bureau. They are a consulting firm that calculates risk for the bank based on the information the bureaus have provided. The bureaus, Trans Union, Experian, Equifax or CSC are separate entities from each other and from FICO. Interesting as that might be, they don't care for one another and often fight about calculation of risk. Those bureaus use something called Vantage score. They feel they have enough of their own data to calculate risk and generate a score. While this is true, a lot of those scores are inflated as a lot of you have already found out. The scores off sites are all over the place, if you go directly to the bureaus and pull your score it has come to a point where it will be closer. However, being off only 5 points could mean the difference in approval and rate. The biggest reason why these scores are so different in my opinion is a couple of things. One is the score ranges, Advantage scores range much higher and lower allowing more forgiveness the way a negative item impacts your score. The accuracy of the information being reported! Meaning, if you're pulling all three scores from Experian how is it they have the correct information from the other two bureaus? Take into consideration that they can't even report their own information correctly. When in doubt, myfico.com is a good resource to obtain your credit. You pay for it, but if you spend $20 on random stuff now consider how much more you could be paying by not having an accurate credit report. Comments and questions are always welcome, I'm always around!
john@redphoenixco.com
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