The first thing to know about the credit score scale is there are several ways to score your credit. This makes for a wide variety of possible outcomes. For example, scoring can vary between models such as FICO and Vantage. The credit score scale on these two models is different. With the FICO score scale starting at 300 and going to 850. The Vantage Score scale goes from 501 to 990.
The second thing to know about the credit score scale is the different formulas used. To once again compare the FICO score and the Vantage score, the math is different. Just one factor like payment history carries a weight of 35% in your FICO score. In the Vantage score, the same factor weighs in at 32% of the score.
The third thing to know about the credit score scale is the score will vary on the credit report used. That is why when you get scores from each credit bureau you will see different numbers. This is because of the fact your different accounts only have to report to one credit bureau. When you view your credit report you will see different things on each report. The fact that your credit score is based on your three different possible credit reports will give you three different credit scores. .
The last thing to know about the credit score scale is the credit model chosen by the majority of the mortgage lenders in the country. The FICO score is the one used. This has its roots in the expansion of consumer credit in the 1990’s. Seeing the effectiveness and the speed to which credit scores granted credit to consumers, the two mortgage giants, Freddie Mac and Fannie Mae, recommended the use of the FICO score. Since these two corporations are responsible for over half of the mortgages in the country, lenders heeded their recommendation.
If you are going to get a loan, you should always start by finding out your credit score before hand. Get all three, this way you are not surprised by anything the lender is going to say about your score. Also, on things like auto loans and other consumer purchases you should ask what credit bureau the lender uses. This will better prepare you for the loan process. Furthermore, if you are going to apply for a mortgage, you need to know your FICO score.
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