Fico Score Models

A FICO score model is a number that rates a borrowers credit record. The score is based on a number of factors, including how well debts have been paid off, current levels of debt, types of credit, and length of credit history. Scores generally range from 350 to 900.

To take out some of the variation that is normally seen amongst scores provided by the 3 bureaus, they have been working together to develop a new scoring method which will actually give everyone a grade rather than a score. Much like grades in school, people will be given a A,A-,B,C, etc score rather than a number.

Scoring is used to help a credit supplier measure your willingness, likelihood to repay a debt. Your credit history allows lenders and creditors to see these within your past payment history.

You may also see that your score is different when you pull it from an online source compared to what a mortgage company may pull. Scoring models are a little different for its intended market.

There are different credit scoring models for each of the three different credit scoring agencies, TransUnion, Experian and Equifax. Each of those credit scoring agencies has different versions of there credit scoring models as well. Just like computer software is updated constantly so are credit scoring models. This is a big reason for some discrepancies between your credit scores between the different reporting agencies and between different creditors. If 2 different lenders tell you your TransUnion score and those numbers differ from each other, this does not mean that one of them is lying to you, it could simply mean that each one of them are using a different version to pull their credit reports through TransUnion. Usually the older version will be cheaper which can save a lender tons of money from making hundreds of thousands of credit checks.

Different credit scoring models are simply different ways of calculating a credit score based on the same information contained in your credit report.