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Why do creditor use Experian when it is NOT a FICO score

New Contributor

Why do creditor use Experian when it is NOT a FICO score

 

 

 

I got desperate a few months ago and applied for credit. I was turned down (TU 684, EQ 634) and noticed the creditor I applied for credit with did not even bother to get my FICO score...they only used the Experian report. Why are creditors using Experian's FAKO scores instead of FICO scores?

Message 1 of 7
6 REPLIES
Moderator Emerita

Re: Why do creditor use Experian when it is NOT a FICO score

Lenders use reports AND scores, whether FICO, inhouse, or whatever.

 

A lender would be foolish not to look at reports. For instance, a 720 FICO might represent a perfectly good credit risk, or it might represent someone who had a 795-820 last week who just declared bankruptcy.

* 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 7
Valued Contributor

Re: Why do creditor use Experian when it is NOT a FICO score

Just because they pulled Experian doesn't mean they used a FAKO, if that's what you mean.  Lenders can still get your Experian FICO, EXP just choses not to allow consumers to access their FICO anymore.

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Message 3 of 7
Valued Contributor

Re: Why do creditor use Experian when it is NOT a FICO score

Only consumers cannot get their Experian FICO score. Lenders can.

Equifax My FICO score 814 11/29/2016, Discover TU FICO 807 12/29/2016 Citibank Equifax Bankcard FICO score 827 12/27/2016 Average of Accounts 13 years and no Installment accounts, 1 TU inquiry in 2015
Message 4 of 7
Community Leader
Legendary Contributor

Re: Why do creditor use Experian when it is NOT a FICO score

There is simply no such thing as an Exp, Eq, or TU score.

They are only the CRAs who maintain your credit file.

When you get any credit score, they all use the credit files of the  CRA upon which the score is calculated. No credit scoring vendor, including Fair Issac, maintains yuour current crdit file information.  So they must cross-license access with the CRAs in order to get the data needed to genarate any credit score.

Each CRA has their own cross-licensing agreement with Fair Isaac to run their data through a licensed FICO scoring algoithm, which results in what we all know as a true FICO score.  All do that, but Ex decided, for their own reasons, to no longer permit the rsults of such scoring to be marketed to consumers through sites such as this one, myFICO.

FICO scores are not the holy of holies,  They are the market share, but not necassarily because they have proven superiority.  They have just been arlound for decades before the implematation of other scorng methods.  So that is most creditors use.

Unless the site you use to get a cdredit score assures that they are using Fair Isaac licensed scoring algorithms, the it wont be a FICO (TM) score.

Maybe a creditor does not want to licnese access to Fair Isaac scores,  but ohly wants to see your credit report.

If your CR is their primary concern, who generates a credit score, and what it is,, may not be what they are seekihng.

So the so-caled "FAKO" scores have value, maybe not so much from a new creditor persp;ective, but certainly from an existing creditor perspective.

Message 5 of 7
Moderator Emeritus

Re: Why do creditor use Experian when it is NOT a FICO score


RobertEG wrote:

There is simply no such thing as an Exp, Eq, or TU score.

They are only the CRAs who maintain your credit file.

When you get any credit score, they all use the credit files of the  CRA upon which the score is calculated. No credit scoring vendor, including Fair Issac, maintains yuour current crdit file information.  So they must cross-license access with the CRAs in order to get the data needed to genarate any credit score.

Each CRA has their own cross-licensing agreement with Fair Isaac to run their data through a licensed FICO scoring algoithm, which results in what we all know as a true FICO score.  All do that, but Ex decided, for their own reasons, to no longer permit the rsults of such scoring to be marketed to consumers through sites such as this one, myFICO.

FICO scores are not the holy of holies,  They are the market share, but not necassarily because they have proven superiority.  They have just been arlound for decades before the implematation of other scorng methods.  So that is most creditors use.

Unless the site you use to get a cdredit score assures that they are using Fair Isaac licensed scoring algorithms, the it wont be a FICO (TM) score.

Maybe a creditor does not want to licnese access to Fair Isaac scores,  but ohly wants to see your credit report.

If your CR is their primary concern, who generates a credit score, and what it is,, may not be what they are seekihng.

So the so-caled "FAKO" scores have value, maybe not so much from a new creditor persp;ective, but certainly from an existing creditor perspective.


By the strictest letter of the law perhaps you are correct but we all know what we all mean when we all mention the different scores and that's all that matters in the end. At least IMHO.  Smiley Happy

 

 

 

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

Message 6 of 7
Valued Contributor

Re: Why do creditor use Experian when it is NOT a FICO score

Each CB does use a different model, though.

 

Equifax:  Beacon 5.0

Experian:  Fair Isaac Risk Model 2.0

TransUnion:  EMPIRICA

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Message 7 of 7