FICO Score Versions Used by Lenders and Credit Repair Companies
A credit rating called FICO is the most widely used tool for banks, credit card companies and mortgage companies to assess the financial risks of potential borrowers. FICO, originally Fair, Isaac and Company (now named Equifax) is a publicly held data analytics firm based in San Jose, California primarily focused on credit scoring. It was established by Bill Fair and Earl Isaac in early 1956. Since its inception, FICO has become a staple of consumer lending throughout the United States.
There are two common methods through which FICO is calculated: the prescreened and the protected. The protected method is far more widespread since it is the sole method available to lenders; this would include mortgage lenders, credit card companies, car dealers and any other financial institutions that handle high risk business with customers whose payment histories are not perfect. Due to the excessive amount of prescreened accounts, the protected method is more widely used by financial institutions and less preferred by individuals or employers who wish to guarantee their creditworthiness with a FICO credit card account. Individuals who use the protected credit score versions of FICO are deemed less creditworthy than those who choose to go through the prescreened version.
The prescreened version of FICO only identifies three types of accounts when assessing your FICO credit scores. These include regular payments, collection accounts and bankruptcies. Regular payments, collection accounts and bankruptcies that are reported by creditors to the credit bureaus, such as Equifax, TransUnion and Experian are viewed as normal credit activity. This view is based upon the information provided by creditors and potential lenders through electronic billing systems and letters. Collection accounts, on the other hand, are reported by collectors directly to the credit bureaus once they have been accessed through electronic means. These accounts are deemed unacceptable by lenders since they do not contribute to the overall credit score, even if they are paid on time.
Lenders use different versions of the FICO software in assessing a credit risk. One type of software is designed to identify certain types of FICO transactions, such as those that result in negative credit history. Other programs identify more specific types of accounts that could lead to negative reports. Because lenders use different software, it can be difficult to know which FICO scores will be used to determine whether or not a particular potential lender or bank is credit worthy.
Credit repair software offers several different FICO scores, which can be used by consumers to find credit-worthy lenders. One option is to have the software automatically email the consumer scores based on the different versions of the software. Another option is for consumers to access and read the FICO scores on their own.
Consumer credit card counseling services also offer different FICO scores, which they provide in conjunction with major credit card companies. The lower your credit card debt, the higher your fico bankcard score. Therefore, when you get a copy of your credit card statements, be sure to review them with an eye to identifying possible issues that may be lowering your credit score. If you have multiple debts and many different creditors, you should consult a consumer credit counseling service to determine whether or not there are specific FICO bankcard score variations that apply to you.
It can be cumbersome to manually manage the day to day credit card spending habits. This is why TGS created its credit management app. This app takes the overwhelm and procrastination out of budgeting. Use this app as a budgeting tool and credit management and you can also donate to your favorite cause as well with this credit management app. Our app is able to integrate seamlessly with your specific financial institution. This cross-credit management mobile application is able to pull all information you need together to make the best decisions as you budget the money spent from your various accounts. Please download The Good Steward Financial System onto your iPhone or Android device. Your fico score does not have to be uncontrollable. You can plan with the help of this tool.