The ABCs of FICO

A credit bureau based credit risk scoring model, more commonly known as a credit
score, is a numeric representation of your credit risk based on a review of the
information in your credit file. The score is generated by a sophisticated credit scoring
model, which is made up a series of complex algorithms. The most common credit
scoring model is the FICO® credit score, designed and developed by Minnesota based
FICO (formerly Fair Isaac Corporation and more formerly Fair Isaac and Company.)

The FICO scoring models are converted to software and installed on the computer
systems of all three of the major credit reporting agencies; Equifax, Experian and
TransUnion. The credit bureaus then use the software under a licensing agreement
with FICO to score their credit reports and sell the resulting scores to lenders, insurance
companies and others who have a need for the number. The credit bureaus pay FICO a
royalty for each score that is sold.

The FICO scoring system is not owned or controlled by the credit reporting agencies.
They do not control what counts in your FICO score and they do not control how much
things count in your FICO score. They are simply the distributor.

Despite myths to the contrary, each of the three bureaus has a FICO score developed
specifically for them from a sample of credit reports, which they provide to FICO. The
FICO score at Equifax is called BEACON. The FICO score at Experian is called The
Experian/FICO Score. And, the FICO Score at TransUnion is called FICO Risk Score
Classic (formerly EMPIRICA).

FICO rebuilds each of their scoring models roughly every 24 months and then installs
the newer version at the bureaus. The older version/s are not decommissioned as it
takes years for a newer model to be fully adopted by the industry. In fact, there are still
major credit card issuers that are using FICO scoring models that were built years ago.
At this time the only places where consumer can get copies of their FICO scores are at
FICO’s consumer website, myFICO.com and via the Equifax website at Equifax.com.

Just be careful at the Equifax site because they’re also selling a non-FICO score. Your
FICO score at Experian is not available to consumers anywhere. And, your FICO score
at TransUnion is only available via the myFICO site and at TransUnioncs.com, but that

TransUnion site will soon be taken down.

“The Credit Guru”, Longtime FICO Insider & Credit Industry Authority President Of The Ulzheimer Group, LLC
John Ulzheimer is a nationally recognized expert on credit reporting, credit scoring and identity theft. He is the President of The Ulzheimer Group, the Director of Credit Education at DisputeSuite.com, Credit Expert at CreditSesame.com and the credit blogger for Mint.com. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. He has served as a credit expert witness in more than 150 cases and has been qualified to testify in both Federal and State court on the topic of consumer credit. 

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