topic Re: FICO Scores in Community Chat

FICO Scores

LilacTree — Thu, 27 Mar 2014 15:14:43 GMT

I don't know how many of you care to know about this, but I follow my FICO scores at least once every couple of months. I subscribe to ScoreSense online.

It really annoys me that both Equifax and TransUnion are within two points of each other (score "Good"), and Experian is a full 30 points lower (score "Fair"). Since these scores determine what finance rate would apply if an individual wanted a loan for any reason (to buy a house or a car, etc.), that Experian could factor into a higher rate for these loans seems unfair.

Does anyone know if they average the scores, or if they consider the higher "good" scores as more representative of one's credit, since two of the services are nearly identical in rating, while Experian is so far below them?

I am not looking for credit right now, so it's not a factor for me at this point. It just seems inequitable overall.

Re: FICO Scores

KathyPet — Thu, 27 Mar 2014 15:18:12 GMT

most companies that offer any sort of credit terms (auto dealers, dept. Stores etc.) have agreements with one,or more credit bureaus to access your score. So, it depends on where your financing source gets your score from. If they have a contract with Experian then that is the score they will use.

Re: FICO Scores

151949 — Thu, 27 Mar 2014 15:26:16 GMT

When we bought our house 4 years ago we applied for a mortgage in case we didn't sell the old house in time and we were given our scores by the mortgage agent. They were quite a bit lower than our scores on the 3 sites where we check them online. the agent said that banks and finance co's use a different scoring system and instead of scores being up to 900 (for example ) the firm they use only scores up to 800 - so no one can have a score > 800. It all depends on the company used and the scale they use - and every company is free to do it however they want. So our score of 770 that we thought was awful was in fact really excellant with that company.And when they send their score to the lender they include the scale they are using.

Re: FICO Scores

bathina — Thu, 27 Mar 2014 15:26:20 GMT

Most of the major banks have their own proprietary internal score based on the 3 bureau scores.

Re: FICO Scores

KathyPet — Thu, 27 Mar 2014 15:47:41 GMT

The other thing to be considered is that each credit bureau has their own top and bottom score so having a score 30 points less at one bureau may not make any difference. Whatnis important is where your score falls in that credit bureau's score range. So if you have a 675 score at a bureau where the top of the range is 800 and a 650 score where the top of the range for that bureau is 700 you obviously will fall into a different category at each bureau.

Re: FICO Scores

LilacTree — Thu, 27 Mar 2014 15:56:02 GMT

On 3/27/2014 KathyPet said: The other thing to be considered is that each credit bureau has their own top and bottom score so having a score 30 points less at one bureau may not make any difference. Whatnis important is where your score falls in that credit bureau's score range. So if you have a 675 score at a bureau where the top of the range is 800 and a 650 score where the top of the range for that bureau is 700 you obviously will fall into a different category at each bureau.

The credit rating numbers are shown on ScoreSense. The Experian rating is 30 points below the other two and shows as Fair on the same chart that the others show as Good (with higher numbers, as I indicated). Maybe that's just the way ScoreSense displays it.

I don't know why these agencies can't be standardized. I'm going to call Experian (I keep saying Equifax by mistake) today and ask them why their scoring system is so much lower than the other two. (Can you tell this is really bugging me?)

Re: FICO Scores

dandyoo — Thu, 27 Mar 2014 16:03:19 GMT

I thought FICO provided the means to calculate a score based on the info the reporting agency has. If you are in fact looking at FICO's score for all three it sounds like the one with the lower # has something negative the others don't. I'd start with checking my reports.

Re: FICO Scores

LilacTree — Thu, 27 Mar 2014 16:06:28 GMT

On 3/27/2014 dandyoo said:
I thought FICO provided the means to calculate a score based on the info the reporting agency has. If you are in fact looking at FICO's score for all three it sounds like the one with the lower # has something negative the others don't. I'd start with checking my reports.

I was told Experian always scores lower, but ScoreSense allows one to see the entire credit report, so I can easily check if there's anything bad on there. I'm still going to call them though.

Re: FICO Scores

------ — Thu, 27 Mar 2014 16:06:43 GMT

Please correct me if I'm wrong but I thought checking your scores frequently will have a negative impact on score. Or is it only credit checks done by third parties? I always found the credit score system confusing.

Re: FICO Scores

stilltamn8r — Thu, 27 Mar 2014 16:07:22 GMT

Yes, in my business we understand the "foibles and idiosyncracies" of the different bureaus and act accordingly...

Also remember that the numerical score is only one PART of the credit granting process- you can be high 700's and have very light credit, for example, and still be considered a greater risk than someone with a lower score and MORE past credit...

Not everyone 700+ is considered a brick...

Re: FICO Scores

stilltamn8r — Thu, 27 Mar 2014 16:09:43 GMT

On 3/27/2014 ------ said:
Please correct me if I'm wrong but I thought checking your scores frequently will have a negative impact on score. Or is it only credit checks done by third parties? I always found the credit score system confusing.

only if you are actually applying for credit...

Re: FICO Scores

LilacTree — Thu, 27 Mar 2014 16:11:06 GMT

On 3/27/2014 ------ said:
Please correct me if I'm wrong but I thought checking your scores frequently will have a negative impact on score. Or is it only credit checks done by third parties? I always found the credit score system confusing.

Not if you join a reporting company like ScoreSense. I am allowed to check every day if I want to, and they have a function that one can "refresh" their score every 28 days. I believe it's if other organizations, banks, loan companies, credit card companies, etc. check your credit often that is what affects your rating because it makes it look as though you are constantly looking into getting more credit. So it's not the same thing.

Re: FICO Scores

gazelle77 — Thu, 27 Mar 2014 16:11:44 GMT

Our credit score has been at 830 for years. All we owe is our home which will be payed off in 4 years. I pay my credit card off each month. What is the highest score possible?

Re: FICO Scores

------ — Thu, 27 Mar 2014 16:12:55 GMT

Thanks for the replies!

Re: FICO Scores

stilltamn8r — Thu, 27 Mar 2014 16:13:33 GMT

On some bureaus its 850 on some its 900

Re: FICO Scores

LilacTree — Thu, 27 Mar 2014 16:14:03 GMT

On 3/27/2014 stilltamn8r said:
Yes, in my business we understand the "foibles and idiosyncracies" of the different bureaus and act accordingly...

Also remember that the numerical score is only one PART of the credit granting process- you can be high 700's and have very light credit, for example, and still be considered a greater risk than someone with a lower score and MORE past credit...

Not everyone 700+ is considered a brick...

Yes, that is true. I have a friend who pays cash for everything and because of that, she has a very low FICO score. She is actually very well off and doesn't want any bills, so it irritates her immensely.

Re: FICO Scores

straykatz — Thu, 27 Mar 2014 16:20:14 GMT

On 3/27/2014 bathina said:
Most of the major banks have their own proprietary internal score based on the 3 bureau scores.

Agree...and many companies use 2 bureaus not all three (transunion and experian are th emost commonly used)

to the OP....if your Experian report is substanially different it is possible they may or may not be reporting exactly what the others reports show......not all companies report their loans to all 3 credit bureaus...for those who don't know it costs money for a company to store their loan/payment data at these burueas....it also costs money for companies to pull your report when you apply for credit....most major creditors use 2-3 or the credit bureaus.

When I worked as an auto loan underwriter the company system auto-denied those who had credit scores too low to qualify for a loan...your credit score is just part of the loan applicaiton picture.....then the underwriters reviewed the credit report for debt to loan ratio, late payments, write-offs, bankruptcies, liens, etc. There are many factors within your report that can cause you to be denied for a loan or get a loan approval.

Re: FICO Scores

gazelle77 — Thu, 27 Mar 2014 16:22:37 GMT

Yes- it is kind of confusing... you can have too much credit and look bad, or not have enough or any and look bad. Having a good income does not hurt. Owing a lot on your cards even if you pay on time can really knock your score down. Better to have just a few cards, not have too high a limit on each card, and not owe a lot on those cards.

Re: FICO Scores

SydneyH — Thu, 27 Mar 2014 16:23:47 GMT

It there is a significant difference from one agency, I would be checking to see what information they have that is drawing the score down. In general they should be pretty close in terms of scoring.

Re: FICO Scores

straykatz — Thu, 27 Mar 2014 16:30:21 GMT

On 3/27/2014 gazelle77 said:
Yes- it is kind of confusing... you can have too much credit and look bad, or not have enough or any and look bad. Having a good income does not hurt. Owing a lot on your cards even if you pay on time can really knock your score down. Better to have just a few cards, not have too high a limit on each card, and not owe a lot on those cards.

ITA....credit cards are classed as revolving credit....owing more than 50% in revolving credit is a major credit score killer.