Credit Reports And Scores Calulated

We have broken down the market below in order to explain in simple terms how the market works. Remember, Credit Scores have a huge effect on your finances by The Info Untapped - The Three Credit Agencies and Your Credit Report Equifax, Transunion, and Experian all collect consumer finance information from creditors. The creditors can be credit cards, banks, insurance companies, and even your local gym or video rental store. Some creditors report to only one agency, while others report to all three.The reason you may have three different credit reports and credit scores is because not all creditors report information to all three agencies.What About Credit Scores?This is where things get a bit more complicated. Based on the information at the three Credit Reporting Agencies, Fair Isaac calculates a FICO score for the data at each agency. Perspective lenders such as car dealers and mortgage companies will look at you FICO score before deciding to over you a loan, and even what interest rate to offer you.

The issue is since you have really 3 FICO scores based on the data at each agency, you don't really know which CreditScore they are going to pull. Some lenders use all three Credit Bureaus and take the middle, while car loan lender might only use one.Great, what about Credit Score that each Credit agency provides?Since each agency has to pay Fair Isaac every time you want your score, they have created their own internal "Credit Score".These scores are an approximation of your real FICO score, however they are not your actual FICO score that a lender will see.They do this so they can give you a score, but not have to pay Fair Isaac for the real thing.Great, what about the government annual free credit report?After consumers made complaints about the credit report market, the government mandated that each agency had to provide a free report to anyone once a year.However, this report does not contain any credit scores, which you have to pay extra for. Since we can't calculate much about our score based on our report, this is of limited value to the average person. You might be able to clean things up on your report, but since you have no idea what your score is you might be wasting your time and not really improve Credit. What should I do if I want my Credit Report and Score right now?

Well, you have two choices. You can either pay for a one time view of your credit report and score. We recommend MyFico Scores/Reports since you get all three credit reports and your real FICO score.Your other choice is to sign up for a credit monitoring program.

Credit monitoring programs charge a monthly fee, however they monitor your credit report and score for any changes and let you know of certain changes. What goes into your credit score?Your credit record contains:Identifying information (your name, address, and social security number) Details concerning your current employment (your position, length of employment, and income) Specifics about your personal history (birth date, dependents, previous addresses and employment) Information about your credit history (how promptly you have paid your debts, Bad Credit, how much and how often you've borrowed)

All the consumer credit that has been extended to you over the past 7 years, including the names of the creditors, dates the accounts were opened, payment patterns over time, and names of joint owners or cosigners The highest and lowest balances from each of your creditors The number of payments made on time to each creditor The number of late payments and how late they were Names of companies or individuals who have requested a copy of your report within the last 2 years Information from public records (bankruptcy, overdue child support, civil suits, and tax liens)If you want to see approximations of how much weight certain factors are given in comparison to others, read this And from TransUnion's website, these are the kinds of "trades" (types of credit listed on your credit report) that go into a perfect credit score.A few (say, 3 or 4) revolving credit cards, each with very high lines of credit ($10,000+), and very low carried balances on only 1 (or maybe 2) of them at a time.

At least one credit card (American Express, Diners Club, etc.). All tradelines at least 6 months old, and at least 1 more than 3 years old. No derogatory notations. Very few inquiries -- no more than 1-3 in a six month period. At least one "installment" tradeline in good standing, i.e., a mortgage, auto loan, or student loan.


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