How To Get The Right Credit Score
Below is a MRR and PLR article in category Finance -> subcategory Credit.
How to Achieve the Right Credit Score
Imagine walking into a lender's office, ready to apply for a loan. You've checked your credit scores from the three major bureaus: Equifax, Experian, and TransUnion. However, you're shocked when your loan is denied or approved with a much higher interest rate than expected. You might wonder how this could happen when you thought your credit score was good. The truth is, it might not be as solid as you believed. It all depends on where you got your score and what type it is.
Understanding Credit Scores
There are various credit scoring methods, and scores from the same credit report can vary significantly. How can you determine your true credit score? Fortunately, 75% of lenders primarily rely on FICO scores, which you can purchase yourself at [myFICO](http://www.myfico.com).
FICO scores are developed by Fair Isaac Corporation and range from 300 to 850, indicating how likely you are to pay your bills. A higher number means better creditworthiness.
Different Scoring Systems
Each of the major credit bureaus has its own version of the FICO score:
- Equifax uses the Beacon system.
- TransUnion uses the Empirica system.
- Experian uses the Experian/Fair Isaac system.
Despite these variations, all systems are based on the original FICO scoring method. However, some lenders may still use their own scoring methods.
The Confusion with Non-FICO Scores
To complicate matters, the credit bureaus sometimes add to the confusion. For instance, Experian announced a national average credit score of 678, but this is misleading. When purchasing your credit report and score from Experian's website, you receive the "PLUS Score," which is not a FICO score and is not used by lenders.
While Equifax allows you to buy your FICO score directly, the only place to get all three FICO scores together is [myFICO](http://www.myfico.com). The 678 score reported by Experian is the average of consumers' PLUS Scores, not FICO Scores.
Why FICO Matters
Non-FICO scores like the PLUS Score are essentially useless for lending purposes. They mislead consumers into thinking they are the same scores lenders use. Even a small difference in your credit score can cost you thousands of dollars. To ensure you have the most accurate and relevant credit score, opt for the industry standard: the FICO credit score.
In summary, always check your FICO score to understand your true creditworthiness and avoid costly surprises.
You can find the original non-AI version of this article here: How To Get The Right Credit Score.
You can browse and read all the articles for free. If you want to use them and get PLR and MRR rights, you need to buy the pack. Learn more about this pack of over 100 000 MRR and PLR articles.