Credit Scores Explained - What The Credit Reporting Agencies Don’t Want You To Know

Posted by Credit expert

March 31, 2011

Ever ask why your banks credit scores are never the same as the ones you bought online? Are you wanting to know what the credit offices are hiding about your credit scores?

The truth is FICO isn’t the sole credit scoring model. It’s simply the one banks use in deciding whether to give you credit. It is also not the one folk often receive when they buy a copy of their credit history on the internet. You get the same raw information, but you don’t get to see the same credit scores that potential banks see.

What makes this very tricky is that the majority of these other credit scores use the same or similar ranges as the FICO score, so it’s simple for the uninitiated to think that they mean a similar thing. They do not, and this may be very dangerous in the longer term.

I say perilous because these credit scores are not figured out the same way as FICO. An action that might enhance your score in another system might basically lower your FICO score. This is a difficulty because if you want to fix your credit you have to know how your actions will have an effect on your scores, otherwise youre just guessing.

Let’s take a look at these other credit scores and who offers them :

CreditXpert (Range 350-850): This score is sold by both Intersections and PrivacyGuard, both companies which sell credit-monitoring directly to the public and also through various corporate deals. You may be able to buy your CreditXpert score from your bank. Potential lenders aren’t going to be buying it from the credit bureaus, so it doesn’t matter when it comes to obtaining credit.
FICO™ (Range 300-850): This score matters: potential lenders use FICO to make credit decisions. If you buy a credit score this is the only one worth the money.
PLUS Score ™ (Range 330-830): This is the score Experian wants to sell you. It’s a consumer only score that’s marketed through several different websites under a number of different brands. Some even claim to be “Free.” The problem with this one is simple; it won’t help when it comes to understanding what lenders are seeing.
TransRisk (Range 300-850): This is the one you normally get from TransUnion. Like FICO, it runs from 300 to 850.

The question that always jumps to mind when having a look at these scores is why do they all use similar score ranges to FICO? It’s possible to use any range of numbers when building a scoring system. If a company wanted they could use as easy a rating as 1-10 or A-F. Instead they use a number that outwardly seems like the one which banks use.

I suspect the straightforward explanation is that they need to earn more money. They’re charging you extra to give you a credit score even though their score is meaningless when applying for credit. They do not need FICO to make all the profit, so they make their credit scores seem like a FICO score, then neglect to tell you there’s a difference. They know the average buyer doesn’t know any better. In reality theyre depending on it.

Brian Diez is a nationally recognised credit expert and the director of Score More Credit. Download your free credit fixing video tutorials at www.ScoreMoreCredit.com and learn how it’s possible for you to fix your credit in the shortest time legally possible .

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