Credit Scores – Quick Summary of the Different Types of Credit Scores
Credit scores are numerical values that represent a consumer’s credit worthiness. There are many types of credit scores. Each credit reporting agency has its own bureau score. There’s also a FICO score and a VantageScore. These four are probably the most commonly heard types of credit scores out there.
Credit Scores are based off a person’s credit history. This information can be found on a person’s credit report. Credit reports are maintained by credit bureaus. There are three main ones in the country. They are Equifax, Experian and TransUnion. Equifax is the largest and TransUnion is the smallest. The reports at each bureau are different from each other. This is because not all creditors and lenders report their jadwal bola information uniformly to all three. Some report to just one. Others might report to two. A handful might just make the effort and report to all three.
Credit scores differ because of the different credit reports used and because of the different scoring models used. Each bureau has its own way of calculating its score. Most will include weighted factors such as payment history, amounts owed, and length of credit in their calculations.
FICO is both a type of credit score and a type of scoring model. It is also the most commonly used type of credit score out there. Both Equifax and TransUnion use the FICO software algorithm in their computations. Experian used to have a working relationship with FICO, but opted out several years ago. It uses its own scoring model now.
Currently there are two FICO scores, each based on a different bureau credit report: Equifax’s FICO score, also called the BEACON score and TransUnion’s FICO score, also called the EMPIRICA score.
The VantageScore is a scoring model created by the three main credit reporting agencies. Some say it’s an effort by the three to compete against the monopoly FICO has over the credit scoring industry. At the moment, the VantageScore has not gained significant adoption