Information is a powerful thing. When it comes to credit and your finances, it can help you make better decisions that improve the quality of life for you and your family. Your credit scores give you an indication of how lenders may see your credit. When you check your scores regularly, you’ll note that they fluctuate according to your credit behaviors. How much the score changes reflects how much the scoring model in use weighs the relative importance of your recent actions. Since each type of credit score has its own related scoring model, credit scores can and do differ.
If you’re new to the world of FICO® Scores, you may have questions about how they specifically weigh the activity in your credit report. There will likely be small differences compared to other credit score calculations, due to the different weights and emphases of each scoring calculation, but don’t worry – the source information for the score is still the information found on your Experian credit report. That hasn’t changed at all.
The PLUS Score you’re used to seeing has scores that range from 330 to 830, and is an educational credit scoring model that Experian developed to help consumers understand creditworthiness. While it isn’t used by lenders, it does illustrate your overall credit picture: higher scores mean you’re handling your credit responsibilities well, while lower scores may mean you’ll need to better manage your credit behaviors.
FICO Scores are developed by the Fair Isaac Corporation as a measure of creditworthiness and are considered by many lenders. FICO Scores are used in 90% of credit decisions, so they’re a likely indicator of how your credit may look when a lender reviews it.
Lenders and insurers can use different scoring models, so you likely won’t see the exact same three-digit score each time your credit score is calculated. Generally, your credit risk level will be the same even though the score itself may be different.
Arming yourself with accurate and timely credit information can make all the difference in your confidence as you embark on your next goal, whether it’s a new car, new house, or accommodating changes within your family.
This article is provided for general guidance and information. It is not intended as, nor should it be construed to be, legal, financial or other professional advice. Please consult with your attorney or financial advisor to discuss any legal or financial issues involved with credit decisions.
Published by permission from ConsumerInfo.com, Inc., an Experian company. © 2015 ConsumerInfo.com, Inc. All rights reserved. FICO is the registered trademark of Fair Isaac Corporation.