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Knowing About Fico Scoring Models? 

Different Fico Scoring Models...

A publicly traded corporation known as Fair Isaac Corporation, (ticker symbol FIC), created a scoring model to predict the likelihood of a default on a loan. This is the most popular, and widely used fico scoring model today.

This fico scoring model is based on statistical data, and information reported on a  consumer’s credit file. It is used by banks and other different lenders to make decisions on whether to extend credit, secured, or unsecured, to a consumer.
Based on the these scoring factors banks, and other lending institutions may deny credit, charge higher interest rates, demand a larger dollar amount as collateral, or demand more in depth verification of information submitted, such as income, time on your job, how long you have lived in current residence, assets and other holdings, and whatever other hoops they want to make you jump through. But how can i raise my Fico Score?

FICO scoring models are used to determine the credit worthiness of an applicant, it is used to show what the likelihood is of the consumer or borrower will default on the loan.

Another model called BNI, will determine if the borrower is  predetermined to declare bankruptcy. Each of the major credit bureaus uses a different scoring method (not necessarily FICO) to calculate a credit score.
So this will often generate a scoring difference between the 3 major reporting agencies, sometimes a difference of 25 to 150 points.

FICO scoring models are used primarily to establish criteria for the major types of loans, mortgage, auto, and consumer credit.
Each lender will have established cut-off points to determine how much they will charge in interest, and what the percentage is for a loan default.
Note that all lenders do not report to all 3 major reporting bureau’s, it depends what agency the lender uses, and the data obtained from that particular bureau.

Credit agencies & scoring names

The 3 major credit-reporting agencies in the Unites States are Experian, Equifax, and TransUnion. Each of these companies uses a different scoring computation to determine credit scores.
These models are based on what data is used, what they need to predict, determine creditworthiness, and how much weight is assigned to each component.

The following agencies use proprietary scoring models basically patterned after the FICO scoring model, but with different criteria.

Fair Isaac Corp develops these different versions, although the numbers for scores can be different. They are based on the FICO risk model.

Credit scoring companies that have not enjoyed the popularity of the major agencies, but are used to determine consumer credit worthiness.

NextGen Score bases their criteria similar to FICO but is not widely used; Community Empower generates a score called the CE Score.

In an attempt to make credit scores more consistent, in 2006 VantageScore was introduced by the 3 major bureaus.
They use a number score range (500 to 990), and assigns a letter (A to F) to specific scores.
VantageScore may be different from bureau to bureau, but differences are from data in the reported information.
FICO is still king used by many lenders; agencies continue to offer FICO scores or similar scores.

Check out the new FICO-08 Model. Changes will both benefit, and hurt the consumer.

 For my personal recommendation on credit repair solutions, and how to erase bad credit legally...

Thanks,
Mike

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