Are all FICO scores created equal?
I am trying to get in control of my finances, and I was told that looking over my credit reports and scores would be a great place to start. I know that my credit score is important and I know that there are three main credit bureaus from which I can get my score. But I am a little confused as to what is FICO and how does it play a part in my credit? As I understand, FICO is a credit scoring agency in the US. If i want to get my FICO score, does it matter which credit bureau I request it from? Are all FICO scores created equal?
When it comes to knowing your credit, FICO plays a very important role. FICO stands for Fair Isaac Co., which is the top credit scoring agency in the United States. The software company was founded in 1956 in San Jose, CA by Bill Fair and Earl Isaac. The two men have worked to create unique credit scoring models that calculate a consumer’s creditworthiness based on the items listed in their credit reports.
It is true that there are other credit scoring agencies on the scene, and each of the three major credit bureaus (Equifax, Experian and TransUnion) have come up with their own scoring models, yet FICO remains the leader of the pack. According to FICO, “90% of top lenders use FICO scores when making lending decisions”. By this information, FICO has built up strong credibility in the world of credit and should thereby be your first destination when looking into your finances.
When it comes time to request your credit score, it does make a difference which federal credit bureau you choose. This is because each credit bureau has its own criteria for what goes on a credit report and how much weight each factor carries when determining overall credit. This is why you have multiple scores and why they might vary slightly in number, even if they are all FICO scores.
If you are applying for a new line of credit, ask your lender which credit bureau they will be pulling your credit report from. If you know this information you can pull your report and score from the same bureau and check it for accuracy and to get a better idea of where you stand before you apply.
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