Trax: About your credit score(s) …

While most people tend to think that they have one credit score, there are actually many different types of scores.

 

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Here are some specifics …

 

According to MarketWatch

Equifax, Experian and TransUnion have  their own algorithms …. each with their own mix of payment history, debt and other factors.

The FICO score — a measure of credit risk that ranges from 300 to 850 and is calculated based on the data in credit reports from the three major credit bureaus — remains the most widely used in 90% of consumer and mortgage loan decisions,

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The three bureaus created a consolidated metric called the VantageScore in an attempt to compete with FICO.

 

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Note: “Recent credit” means number of inquiries against your account by lenders – whether you initiated the process or not.

For example, if a crook fraudulently applied for a credit card in your name and the credit card company pulls your credit report … then your credit score gets dinged unless you (1) detect that the inquiry was made, and (2) get the credit bureau to take the inquiry off your record.

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Of course, there are two parts to both the Vantage Score and the FICO score – the weighting of the variables and the quality of the data.

With regards to the latter, MarketWatch says …

1 in 5 consumers has an error in at least one of their three credit reports.

When there’s an error – say, identity theft or erroneous reporting — the burden of proof is on the consumer  — rather than on the credit agency or lender.

That is,  consumers have to provide the credit bureaus with evidence of their innocence.

Credit bureaus resolve an average of only 15% of consumer disputes internally, while the remaining 85% are passed on to the lenders or creditors for resolution.

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FYI: I was surprised by the number of errors on my credit report … including listing as “current employer” a company that I hadn’t worked for in 15 years … and listing a prior address in Alabama. Nothing against the state, but I don’t think I’ve ever even visited Alabama …

This stuff is really starting to creep me out.

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