Does everyone have 3 different FICO scores, or is your credit score actually the FICO?

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September 30th, 2010 - Posted by Tasha

Q: Does everyone have 3 different FICO scores, or is your credit score actually the FICO? Do I need all three FICO scores, or will they too be very close in range to matter?

A: Yes, everyone has three different FICO scores: an Equifax FICO score, an Experian FICO score and a TransUnion FICO score.  This is because everyone has a credit report kept at each of the 3 different, privately-owned credit bureaus – Equifax, Experian and Transunion – so you have a different FICO score for each credit report.

There are different brands of credit scores, and each one uses it's own formula to calculate your credit score.  FICO is a branded credit score developed by a company called Fair Issac.  It is a fairly popular credit score, and is often used by lenders.  It is always good to know all three of your credit scores as they can vary substantially and you never know which one a lender might use, or they might use all three.

Unfortunately, the Experian FICO score is not available to consumers. The other two can be purchased through myfico.com.  However, most other brands of credit scores are just about as good as the FICO brand. For example, the three credit scores you get from Identity Guard will very likely be extremely similar to your three FICO scores.  And since these scores are based on the same three credit reports that your FICO score is based on, you can be fairly certain that any variation in these three scores will be mirrored in your three FICO scores.  Regardless of what brand of credit score you are looking at, the key takeaway is the description given each score – usually these are excellent, very good, good, fair and poor.

The Free FICO Score is Back

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September 14th, 2010 - Posted by Erik

We get a lot of questions to the tune of "How can I get my FICO score for free"?  For a while there, the answer was "You can't."  Not any more.  myFICO.com is once again giving you a free FICO score when you sign up a for a 10-day free trial of Score Watch, their FICO score monitoring service.  If you decide you don't want to keep the service, just cancel before the 10-day trial is over.  The FICO score and detailed Score Power report, which includes your latest FICO score, your latest Equifax credit report, a FICO Score Simulator that estimates what your score would be if you took certain actions, as well as a full explanation of factors affecting your credit score, are all yours to keep for free.

We think the Score Watch service is a nice value for those interested in their FICO score, so many folks will want to pay the $12.95 per month to keep the service. It will give you an alert and updated score any time your Equifax credit report changes, so you will always know your most up-to-date Equifax FICO score. For more details, see our myFICO review.  For ways to get other types of credit scores for free and to see how myFICO compares, check out our credit monitoring section.

My credit score is 761, and my wife has a 764 FICO score. We are trying to refinance and are wondering in these are good enough scores.

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May 27th, 2010 - Posted by Tasha

Q:  My credit score is 761, and my wife has a 764 FICO score.  We are trying to refinance and are wondering in these are good enough scores.

A: This is a tricky question, mostly because creditors use their own judgment as to what is a "good" score and what isn't.  Your FICO score is calculated based on 5 factors:  payment history (35%), amount owed (30%), length of credit history (15%), new credit (10%), and types of credit used (10%).  Fair Issac basically puts all this information into their magic (and secret) algorithm blender and generates your FICO score.   Your FICO score (and everyone else's) is included in the national distribution of FICO scores provided by Fair Issac.  Creditors draw their own conclusions from this data.

However, your FICO score isn't the only factor they take into consideration.  Creditors also look things like your income, employment history and credit history.  Then based on all this information (and their own underwriting policies) they decide whether they will offer you credit and on what terms.  So if your combined income is $90,000/year, you've had a spotty employment history and you want to refinance a $1,000,000 loan, they may feel the credit risk is too high, regardless of your FICO score.  On top of this, sometimes regional factors come into play, so a suburban midwest creditor may perceive your information differently than an urban east cost creditor.

Of course, a FICO score that's perceived as high should help.  Our advice is to do your research, approach several creditors for the refinance loan and see what they come back with.   And make sure you stay on top of your credit history and scores, because they are a moving target and fluctuate over time.  The easier (and least expensive) way to do this is to sign up with a credit report monitoring service like our top rated Identity Guard.

Will my FICO score be affected by the change in credit card interest rates and other things that have happened during the economic downturn?

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May 18th, 2010 - Posted by Tasha

Q:  Will my FICO score be affected by the change in credit card interest rates and other things that have happened during the economic downturn?  It seems that everyone's score is lower now, so is there a new range lenders look at?

A: The method used to calculate a FICO score is cloaked in secrecy, but every now and then this formula is updated.  The most recent update, called FICO 8, happened in 2009 and was intended to keep pace with changing consumer credit behaviors.   The new formula eased penalties for isolated late payments on credit card balances (this is good), and made the FICO score more sensitive to highly utilized credit cards (not so good, for those that carry high credit card balances month to month).  It also included a few other more minor changes.

Fair Issac, the creator of FICO, claims that almost 50% of consumers have scores no more than 20 points higher or lower than  their scores from the previous version of their formula.  This means that the range of FICO scores nationwide should not have shifted that much.  Fair Issac reports the following distribution of FICO scores:

What lenders and creditors chose to do with the FICO range information is up to them.  Each lender evaluates credit risk in a different manner, so one lender could see a 649 FICO score as a risk, while another could see it as a perfectly acceptable score.

Remember, there are many different methods of calculating a credit score.  If you're specifically interested in your FICO score, make sure the score you're looking at is labeled as such.  You can purchase your Equifax and TransUnion FICO scores for $15.95 each with FICO Standard.  Due to a dispute with Experian, there is no way for consumers to obtain their Experian FICO score.

Reader Question: What is the best way to monitor my FICO score

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April 1st, 2008 - Posted by Joe

This is the first post in our new "Reader Questions" series where we will begin sharing questions from real readers for the benefit of the community at large. If you have questions for the NextAdvisor team you can submit them directly to us through our contact form.

Q: I was impressed by your review of the various credit reporting services, but also a little confused by all the choices. Maybe you can help me. My primary concern is to check my FICO score on a regular basis (say, monthly) — which service would be best for me?

A: If your primary goal is to monitor changes in your FICO score then we believe that myFICO is the best credit report service for you. However, if you want some of the additional benefits that people typically associate with credit report monitoring services, such as on demand access to credit report data and credit report monitoring, you may want to consider a service like CreditCheck Total.

MyFICO will provide you with two free score power reports each year which include your up-to-date FICO score. They will also provide you with an updated FICO score anytime there is a change to your credit file. This will ensure that you always know how changes in your credit report are impacting your FICO score.

There are some limitations to MyFICO in that they only monitor your Equifax credit report. Since all three of your credit reports, including Experian, Equifax and TransUnion, can differ from each other you won't necessarily have direct access to all the information that could be impacting how lenders view your creditworthiness. Additionally, MyFICO only gives you two reports a year while some other services allow you to access data at any time.

CreditCheck Total, for example, will give you access to all three credit reports and all three credit scores on demand. This doesn't include FICO scores, but will still give you a good indication of how you overall credit health is trending. CreditCheck Total also has the added benefit of helping protect you from identity theft by monitoring all three of your credit reports for changes.

The trade off with CreditCheck Total is that you won't have access to the FICO score data you are most interested in receiving on a frequent basis. CreditCheck Total also has a more expensive monthly fee at $19.95 versus MyFICO's $7.50

The good news is that both MyFICO and CreditCheck Total offer a free trial of 30 and 7 days respectively. So, you could try each out and decide which is right for you.

You can also learn more by visiting our full comparison of credit report monitoring services.

New FICO score will help some, hurt others

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December 19th, 2007 - Posted by Joe

Fair Isaac Corporation, otherwise known as FICO, has created a new scoring system that will change how potential lenders may view your credit history.

FICO is a household name that is synonymous with credit scores, particularly to anyone that has ever applied for a home loan, auto loan or credit card. FICO estimates that 90% of major banks use their scoring methodology to analyze the credit worthiness of consumers.

The new FICO score, officially called FICO 08, was created to more accurately predict the credit risk of an individual. It will be more lenient on people who may have had a few credit slip ups in the past but otherwise have had fairly responsible credit practices and much more harsh on those who repeatedly make credit mistakes.

FICO provided these very helpful examples of how the new FICO 08 score may impact different types of people based off of their credit history.

This is great news for consumers that are actively working to improve their credit and adopting healthy credit habits and even more reason for those people that have habitually poor credit to take moves to improve.

The FICO 08 score also makes it extremely important to have a full grasp on the contents of your credit report as inaccuracies could cost you once the new formula begins calculating scores. The simplest and most effective way to get a full grasp of your current credit profile is to sign up for a credit report monitoring service. These services will give you access to your credit report, credit score and alert you to any changes on your credit report.

All of the credit bureaus, including Equifax, Experian and TransUnion, provide these services and we have reviewed and compared all these credit report monitoring services for the benefit of our readers.

Type carefully when looking for a free credit report

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December 19th, 2007 - Posted by Joe

A recent study by USA Today and online security company Symantec found hundreds of websites that took advantage of typos to direct consumers away from their intended destination when searching for a credit report.

These sites have domain names very similar to those of the credit bureaus. For example, freecreditrepotrt.com may accidentally be reached by consumers that are attempting to visit Experian's FreeCreditReport.com. While most of these sites likely pose little threat to consumers, it is still important to be fully aware who is operating the website you are visiting before you engage in any business dealings.

One simple way to ensure that you are on the website you intend to be is to check the privacy policy and/or contact us links which are typically at the bottom of the web page. If these items aren't present or seem suspicious, it is a good idea to move along.

We here at NextAdvisor deal directly with all the major credit report monitoring services and make sure that all links on our site are valid and directing to reputable service providers. You can click on any of the links below to visit the official websites of each of the credit report monitoring services that we have reviewed:

• Identity Guard
• Equifax
• ProtectMyId by Experian
• MyFICO
• FreeCreditReport.com
• TrueCredit 3 Bureau
• Transunion