When you are denied credit, they provide you with a credit score and a ‘good luck in the future’ comment. Understanding your credit score will help you as you embark on your credit repair journey. I hope this explanation of credit scoring provides some of the essentials needed to obtain that perfect credit score.
Explanation of Credit Scoring : The FICO Score
The FICO scoring model is the number 1 scoring model when it comes to credit scoring. FICO is used by 90 percent of all lenders who provide credit or loans. While there are many different types of credit scores, this is really one of the only ones you will need to be mindful of.
Each credit reporting agency contracts out to FICO to provide credit scores for their clients. You need to be aware that many, many version of your FICO score exist.
For specific information relating to what impacts your FICO score, please go to my article on FICO scoring.
Explanation of Credit Scoring : Vantage Score
The credit reporting agencies have tried to fight back by going in together on a new score, called the Vantage score. Some companies do use this score, but it is very minimal. This score is most commonly sold to other companies to provide you with a ‘real’ credit score on their website (IE CreditKarma) – It is required to be aware of this score, but don’t dictate your credit repair around it. For more information, check out my article on Vantage Scoring.
Explanation of Credit Scoring : FAKO Scores
Educational scores, also known as FAKO scores, are provided by credit reporting agencies, credit card companies via credit monitoring, and credit websites. Usually associated with monitoring services, this scores are completely pointless. They provide no real value, and they often use different criteria to impact scoring. The key here is to make sure whatever score you base your repair off of actually says FICO on it!
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