Understand Your Credit Report and Credit Score - Part 2

When a lender gets your credit report, they can also generally get your credit score. A credit score is a mathematically calculated number based on the information in a credit report. By comparing this information to hundreds of thousands of other credit reports, credit reporting agencies come up with a number that can be used to identify your level of future credit risk.

Credit scores are often called “FICO scores” because most scores are produced from software developed by Fair Isaac Corporation also known as FICO. FICO scores range from 300 to 850 – the higher the score, the lower the risk.

In order for a score to be calculated on your credit report, the report must contain at least one account which has been open for at least six months. The report must also contain at least one account that has been updated in the past six months. This ensures that there is enough recent information in your report on which to base a score.

Will Scores be Different at Each Credit Reporting Agency?

Yes, but they should be within a few points of each other. If they do differ by more than a few points it should be a red flag that something is wrong and should be further investigated. FICO uses the same method to come up with each score, but the score at each of the three agencies may not be exactly the same because of the different ways lenders report information to the agencies.

Is FICO the only credit score that lenders use?

No. Many lenders use scoring systems that include the FICO score but may also consider other information in your credit application including the customer’s history with the institution. However, when purchasing a credit score for yourself, make sure to get the FICO score, as this is the score most lenders will look at in making credit decisions. It is important to remember that no one piece of information or factor alone will determine your score and while lenders use scores to help them make lending decisions, every lender will have its own set of guidelines for a given credit product.

WKFCU Looks At The Big Picture

When you apply for a loan at your credit union, we will pull your credit report and look at your FICO score. We also consider your length of employment, your history with the credit union, whether or not you have direct deposit or payroll deduction with us and your active credit union accounts before making a decision. Your credit union sees you as a valuable member, not just a credit score. A local person makes all lending decisions, not a computer or someone far away in a home office.

Member Loyalty Discount

WKFCU members can receive 0.25% APR off their loan rate for vehicles, boats, RVs and ATVs with our Member Loyalty Discount. You can receive the discount if you have been a member of WKFCU for 5 years or if you have 2 of the following services -- Checking, Share Certificate, Direct Deposit, e-Statements or a WKFCU VISA Classic Credit Card.

More on your credit score and and what information is included next week.

(Reprinted in part from https://www.dfs.ny.gov/consumer/creditreport.htm)