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Great Credit Score? Think Again.

Thursday, January 24, 2013 - 5:11 PM
From CNN Money:




Your 790 credit score might not be as great as you think it is.       

For example, while a FICO score of 790 out of 850 is considered excellent, it's merely mediocre on the VantageScore model -- which tops out at 990.    Overall, the eight most common credit scores used by lenders and consumers range from as low as 150 to as high as 990, according to a new Credit Sesame diagram created by John Ulzheimer, president of consumer education at SmartCredit.com and a former manager at FICO.

The three major credit bureaus, TransUnion, Experian and Equifax each have their own scores. TransUnion's TransRisk score ranges from 300 to 850 and the Equifax Credit Score ranges from 280 to 850. Meanwhile, one Experian score ranges from 360 to 840 and another ranges from 330 to 830. And then there's the score the bureaus created together, the VantageScore, which ranges from 501 to 990.                 

All of these different scoring models can make it hard to know how you're actually being assessed by a lender.

 
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pearlbrownpearlbrown1,431 posts since
Nov 2, 2010
Rep Points: 6,248
1. Thursday, January 24, 2013 - 11:05 PM
Thanks much, Pearl, for the article.

"Adding to the confusion, lenders aren't always looking at the same scores either. Within the FICO category alone, lenders look at more than 49 different FICO scores to assess risk -- but consumers generally only receive the generic FICO score. And one out of five consumers is likely to receive a score that is "meaningfully" different from the score used by a lender to make a credit decision, a recent study from the Consumer Financial Protection Bureau found."

Is this a necessary complication or bored people (e.g., VantageScore folks), who have nothing better to contribute to the human society??  Take a deep breath and ask yourself: "What is wrong with this FICO picture?"

I maintain that 790 out of 850 is a great FICO score no matter how you look at it.  Simply adding another measuring system does not add value at all, unless one is adding more significant metrics to the system.  To simply change the scoring range in the same sampling space is both trivial and unnecessary in my humble opinion.
3
51hh51hh1,476 posts since
Jan 16, 2010
Rep Points: 6,426
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