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Save Time, Money, and Frustration and Get the Right Credit Score

You go into a lender's office prepared to apply for and receive a

loan. After all, you've done your homework, you've pulled your

credit reports and you know what your credit scores are--you even

got one score from each of the three major credit bureaus:

Equifax. Experian, and TransUnion. You are shocked when your loan

is denied, or maybe you were approved, but the interest rate is

much higher than you anticipated. How can that be you say? My

credit score is good, I know I checked. Maybe it's not as good as

you think. It all depends on there you got it and what kind of

credit score it is.

The fact is there are several different credit scoring methods.

Credit scores calculated from the same credit reports can differ

substantially from credit scoring method to credit scoring

method. So how can you ever know what your credit score really

is? Well, luckily, 75% percent of lenders use FICO scores

exclusively and you can purchase FICO scores yourself--you just

have to know where to go. (www.myfico.com)

FICO credit scoring is a numeric method of scoring your credit

worthiness developed by Fair Isaac and Company. Your credit score

is a number between 300 and 850 that tells creditors how likely

you are to pay your bills. The higher the number, the better it

looks to potential lenders and creditors.

The three major credit bureaus each have their own version of the

FICO score: Equifax uses the Beacon system, TransUnion uses the

Empirica system, and Experian uses the Experian/Fair Isaac

system. Despite each credit bureaus' use of their own versions,

all systems are based the original Fair Isaac FICO scoring

method, so each credit score calculated with these systems are

generally called FICO scores. However, although most lenders do

use FICO scoring, some lenders may have their own scoring

methods.

There is only one place where you can get your FICO score from

all three bureaus and that is at www.myfico.com. If you order

your credit score from anywhere else, again be aware that these

scores are "FAKOs" (or "fake") and can differ considerably from

your FICO credit scores.

Adding to the confusion is the credit bureaus themselves.

Recently, Experian revealed that the national average credit

score of its consumers is 678. This is very misleading to the

average consumer. When you buy your credit report and score

directly from Experians website, you are getting what they call

the "PLUS Score," which is NOT a FICO score, and is NOT used by

lenders anywhere. (Equifax is the exception--you can buy your

FICO score directly from them at their website; however, the only

place to get all three scores together is at www.myfico.com.) The

678 PLUS Score reported by Experian is actually the average of

consumers' PLUS Scores, not their FICO Scores.

Clearly, the PLUS Score (and all Non-FICO scores) are useless.

Not only that, but such hype misleads consumers into purchasing

their PLUS Score thinking that they are getting the same credit

score that their lender will use. Non-FICO scores are worthless

not matter what the credit bureaus or any website selling

non-FICO scores claim. Even a few points difference in your

credit score can mean confronting the reality of the loss of

thousands of dollars out of your pocket--a loss that you probably

didn't plan for. The next time you want the most accurate credit

score available, do yourself a favor and get the industry

standard: the FICO credit score. This article is free for republishing
Source: http://www.articlealley.com/article_34644_19.html


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