Credit Scores

Credit Scores: How They Generally Work

Credit Scores: How They Generally Work

The lending industry has many different types of credit scores on the market today. Many different vendors have created them, such as Fair Isaac, the three national repositories, credit grantors, and insurance companies. 

CFPB Releases Results of Study of Differences Between Consumer and Creditor Purchased Credit Scores

What should you do if you learn that your credit report has errors? You can either contact us about how to proceed or send a dispute to the consumer reporting agency (CRA) on your own. There are several ways to initiate the dispute process with the CRAs, including using the dispute form which you may have received when you ordered your credit report; using the CRAs online dispute form; sending a dispute letter by mail (certified mail is recommended but not required); or by telephone. Whichever method you choose, you should remember to keep an accurate record of your dispute, including a copy of your dispute form or letter. If you use the online dispute form, you should take a screen shot of your dispute before sending it. 

Credit Scores - FICO and VantageScore

FICO Score

According to court filings by Fair Isaac, the creator of the FICO score (the dominant and most well-known consumer credit score in the United States), a “Credit Score” is a representation of an individual consumer’s financial creditworthiness that quantifies the risk that a consumer will fail to repay a loan or other credit obligation. “Credit Scoring” is the process by which an algorithm, or set of algorithms is applied to Aggregated Credit Data to generate a Credit Score.

“Aggregated Credit Data” is the historical records of an individual consumer’s borrowing and repayment as reported to credit reporting agencies by multiple lenders and servicers of loans. “Aggregated Credit Data” is separately compiled, reported, and sold by Equifax, Experian, and Trans Union (collectively, the "Consumer Reporting Agencies"), with such activity representing the core of their respective businesses.  Credit reporting in the United States is entirely voluntary and, therefore, the Consumer Reporting Agencies depend on major financial institutions, other lenders, and merchants to provide data.