cancel
Showing results for 
Search instead for 
Did you mean: 

Are Fico Scoring Models at the Big Three Different ???

tag
veracious
Established Contributor

Are Fico Scoring Models at the Big Three Different ???

According to information provided by My FICO, I'm a bit confused.

 

See the highlighted statement from Credit Basics---Credit scores shown below in red.

 

http://www.myfico.com/crediteducation/creditscores.aspx

 

About credit scores

When you apply for credit – whether for a credit card, a car loan, or a mortgage – lenders want to know what risk they'd take by loaning money to you. FICO® scores are the credit scores most lenders use to determine your credit risk. You have three FICO scores, one for each of the three credit bureaus: Experian, TransUnion, and Equifax. Each score is based on information the credit bureau keeps on file about you. As this information changes, your credit scores tend to change as well. Your 3 FICO scores affect both how much and what loan terms (interest rate, etc.) lenders will offer you at any given time. Taking steps to improve your FICO scores can help you qualify for better rates from lenders.

For your three FICO scores to be calculated, each of your three credit reports must contain at least one account which has been open for at least six months. In addition, each report must contain at least one account that has been updated in the past six months. This ensures that there is enough information – and enough recent information – in your report on which to base a FICO score on each report.

About FICO scores

Credit bureau scores are often called “FICO scores” because most credit bureau scores used in the U.S. are produced from software developed by Fair Isaac and Company. FICO scores are provided to lenders by the major credit reporting agencies.

FICO scores provide the best guide to future risk based solely on credit report data. The higher the credit score, the lower the risk. But no score says whether a specific individual will be a “good” or “bad” customer. And while many lenders use FICO scores to help them make lending decisions, each lender has its own strategy, including the level of risk it finds acceptable for a given credit product. There is no single “cutoff score” used by all lenders and there are many additional factors that lenders use to determine your actual interest rates. However you can now see what interest rates lenders typically offer consumers based on FICO score ranges.

Other Names for FICO Scores

FICO scores have different names at each of the credit reporting agencies. All of these scores, however, are developed using the same methods by Fair Isaac, and have been rigorously tested to ensure they provide the most accurate picture of credit risk possible using credit report data.

Credit Reporting Agency FICO Score
EquifaxBEACON® Score
ExperianExperian/Fair Isaac Risk Model
TransUnionEMPIRICA®
More than one credit score

In general, when people talk about "your score", they're talking about your current FICO score. However, there is no one credit score used to make decisions about you. This is true because:

  • Credit bureau scores are not the only scores used.
    Many lenders use their own credit scores, which often will include the FICO score as well as other information about you.
  • FICO scores are not the only credit bureau scores.
    There are other credit bureau scores, although FICO scores are by far the most commonly used. Other credit bureau scores may evaluate your credit report differently than FICO scores, and in some cases a higher score may mean more risk, not less risk as with FICO scores.
  • Your credit score may be different at each of the main credit reporting agencies.
    The FICO score from each credit reporting agency considers only the data in your credit report at that agency. If your current scores from the credit reporting agencies are different, it's probably because the information those agencies have on you differs.
  • Your FICO score changes over time.
    As your data changes at the credit reporting agency, so will any new credit score based on your credit report. So your FICO score from a month ago is probably not the same score a lender would get from the credit reporting agency today.
Was this article helpful? Give us feedback

 

Free Newsletter Sign-Up

Sign up for myFICO's monthly email newsletters to receive credit management resources, discounts on products and services and event invitations to credit-based educational presentations.

 

_________________________________________________
"You may never know what results come of your actions,
but if you do nothing, there will be no result" ~ Mahatma Gandhi
Message 1 of 5
4 REPLIES 4
haulingthescoreup
Moderator Emerita

Re: Are Fico Scoring Models at the Big Three Different ???

Each formula (for each bureau) is a bit different. When it says that they're developed by the same methods, I think that means that they develop the formulas by analyzing credit reports for that bureau. Since reports tend to vary by bureau, I guess they wind up with a different statistical sample, so the formulas get weighted slightly differently.

 

You'll often see comments here such as "Equifax hates lates" (it does!!), because those with lates on our reports often have lower EQ FICO's than TU or EX FICO's.

 

When I first started getting my adult kids involved in understanding their credit, each of them had the same info on their reports. (Each kid had the same info on each kid's reports, not all three kids having same info, if that makes any sense.) Even with thin credit files that were identical across the bureaus, they had different scores, due to the different formulas.

 

Even if the identical formula were used for each bureau (this was the idea behind the Vantage FAKO score), it would still be very easy to wind up with different scores, because most of us have different info on each of our reports. So Equifax lost an old closed account of mine, which still appears on the other two. I have an ancient closed gas card that is only on Experian. TU mysteriously and blessedly, and I promise I don't know how it happened, lost all my lates over 3-4 years old, which was basically all of them. And so forth.

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 2 of 5
veracious
Established Contributor

Re: Are Fico Scoring Models at the Big Three Different ???

Thanks haulingthescoreup.

 

So, would it be reasonable to presume that idenitcal young (new) credit reports that were reporting  zero balances,

zero utilization,  identical trade lines,  and pulled at the same instant,  would all be different?

_________________________________________________
"You may never know what results come of your actions,
but if you do nothing, there will be no result" ~ Mahatma Gandhi
Message 3 of 5
haulingthescoreup
Moderator Emerita

Re: Are Fico Scoring Models at the Big Three Different ???

It is very possible that the three FICO scores would be different; yes.

 

Back when we could pull all three Smiley Sad, we'd occasionally see someone with two that matched, but I don't think that I ever saw anyone will all three matching.

 

But under the parameters you set, they'd probably be pretty darn close.

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 4 of 5
veracious
Established Contributor

Re: Are Fico Scoring Models at the Big Three Different ???

hauling, what you said is good.

I was looking at the FICO page here......http://www.myfico.com/CreditEducation/WhatsInYourScore.aspx

 

FICO is indistinctive in the way it states the five categories in your score.

By that I mean, if all three bureaus use the same identical categories how does a difference occur between bureaus.

 

They should state that each bureau uses a slightly different algorithm based on the five categories. No where do they state this.

 

I mean credit scoring is proprietery information but, why does FICO not admit that each bureau uses a different formula.

I looked throughout their consumer literature and I couldn't find it.

 

Thanks for making it public.

_________________________________________________
"You may never know what results come of your actions,
but if you do nothing, there will be no result" ~ Mahatma Gandhi
Message 5 of 5
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.