Credit Scores (FICO Score) And Credit Reports - nine Common Misunderstandings

Misconception #1: Credit scores and reports are handled by the government. - False

Fact: Credit scores and reports are regulated by laws like any other business but aren't directly governed or handled by the government. The 3 credit bureaus (Experian, Equifax, and Transunion) are organizations that collect information about individuals in order to package and advertise it to various other companies. FICO it's essentially a software company. The software of theirs is what figures out credit scores. FICO sells this software to the three bureaus.

Misconception #2: Credit scores are just a further part of the credit report. - False

Fact: Credit scores are not part of the credit report; they are generated from the info in the report. It is a slight but important distinction. Your report is economic info regarding you gathered by the bureaus. your score is based on this info, i.e., if you improve the report of yours, you will improve your score.

Misconception #3: I've one credit report and one credit score. - False

Fact: You have three different credit reports and three separate scores based on those reports. Most of the three credit bureaus keep the own credit report of theirs about you. They all calculate your score based on the version of theirs of the article of yours, as well as they all compute - http://www.buzznet.com/?s=compute the score a bit differently. The score of yours can easily be a 50 to 100 points distinct from one bureau to the next.

Misconception #4: Credit accounts are computerized, so they should be correct. - False

Fact: Credit reports are not perfect. There is no central computer that all the banks as well as Best Bad Credit Loans ( mouse click the following internet site - https://www.tacomadailyindex.com/blog/best-bad-credit-loans-2022-top-hig... ) cards are connected to. If perhaps you owe income to an enterprise, they can report your payment history to one, almost all, or not one of the three credit bureaus, as well as errors do occur. Based on the US Public Interest Research Group, as many as 25 % of credit reports have significant mistakes.