What are FICO Scores?

FICO is a data gathering company called "Fair Isaac & Company."

FICO has reviewed and interpreted literally millions of credit profiles and has developed a set of risk factors which it uses to forecast how a person will handle credit in the future. The major bureaus or credit reporting agencies (CRA) obtain this information from FICO and assign a numeric value to the results. The scores can range from the low 200's to over 800. Typical scores range from 500 to 750.

Each bureau has a different name for the score. This is a marketing tool and in no way changes the information reported. The names given to the score by each major bureau are as follows:

      i. Experian calls its score "Fair Isaac"
     ii. Equifax calls its score "Beacon"
    iii. Trans Union calls its score "Empirica"


Scores May Vary from Bureau to Bureau

The reasons for the variance are that not all companies report to all three bureaus. The bureaus may interpret the information differently, and the bureaus may weigh the information differently.

How does FICO determine my score?

FICO has developed a set of "risk factors" which it uses to forecast responsible use of credit. Each bureau assigns a value to each of the risk factors and computes your score based upon the risk factors associated with your credit profile.

Some of the risk factors are:

     1. Amount owed too high.
     2. Amount owed too low.
     3. Too few bank revolving accounts.
     4. Too many bank revolving accounts.
     5. Too many accounts with balances.
     6. Too many open accounts with zero balances.
     7. Too many consumer finance accounts.
     8. Too many recent inquiries.
     9. Too many accounts opened in the last 12 months.
    10. Proportion of balances too high to credit limits.
    11. Too few accounts paid as agreed.
    12. Too many revolving balances.
    13. Too few revolving balances.
    14. No recent revolving balances.

There are obvious inconsistencies in these risk factors. While there may be too many or too few of a particular factor, it is unclear how the consumer may determine how many are too many or too few.

When you receive your credit report, these factors are listed with a corresponding number. The number is simply a way for the bureau to identify each risk factor. It is not a credit score.


Credit Reporting Bureaus
There are three major credit bureaus. The names and addresses of the major credit reporting agencies or bureaus are:

    1. Experian (Formerly TRW)
        P.O. Box 9595 Allen, TX

     2. Equifax
         P.O. Box 105518 Atlanta, GA 30348

     3. Trans Union
         1531 E. Orangethorpe Avenue, Fullerton, CA 92831


There are other reports which are called "tri-merge" files. These are not major reporting agencies. They are second hand recipients of the information and have no authority to change the information listed in your credit profile. Disputing information on these files will be ineffective.

You may obtain a copy of your report from these companies in the following ways:
    1. You may write or call each bureau individually and request your report. This will cost $8.00 per report per bureau and, while it is controlled by law, the cost may increase from time to time.

    2. You may go online to each bureau's website and order a report by using your credit card. This method is more costly, but it is immediate. In addition, the bureaus offer different services, including monitoring or alerts when there is a change in your report.

    3. If you have been rejected after applying for credit, you may obtain a free credit report by sending the rejection letter to the bureau listed in the letter. The bureau must provide a credit report to you if it receives your request within 60 days of the date of the rejection letter.

    4. You may dispute entries on your credit report. After investigating your dispute, the bureau will provide you with an updated credit report.