myFICO.com ReviewPosted by Cap on September 4, 2006 |
This is an in-depth review of myFICO FICO scores provided by Fair Isaac. If you’re purchasing a FICO score, don’t forget to check for myfico promotional code before you buy! This review was written when myFICO.com previously offers Experian FICO scores to consumers, unfortunately as of recent development, an Experian FICO score can no longer be purchase at myFICO.com.
FICO scores are a lot like lottery tickets. You’re paying for a bunch of numbers that will become meaningless (sort of) in the future. One of them can potentially save you thousands of dollars, while the other is a complete utter waste of money.
What’s a FICO Score?
There are about seventy-two hundred articles about FICO scores on the web (yup, counted). If you’ve read at least four hundred of these articles on FICO scores, you can skip ahead and go straight to the review. If not, you’ll be able to pick up some basics on FICO credit scoring by reading this explanation section.
FICO scores are a set of three numbers that represent your credit worthiness; they are computed by the Fair Issac Corporation. Each of the score is derived by your credit history from each major credit reporting agency: Equifax, Experian, and TransUnion.
Because your credit history may vary from one credit reporting agency to the next, your FICO scores may be different from one another. The scores will also change when the information in your credit report are updated as time pass.
Thus, FICO scores are a type of credit scores. For the banks and lenders that do use FICO scores, your scores can affect the bank’s decision in whether to extend you credit and the amount of interest you’ll be charged. The FICO score ranges between 300 and 850. The higher the numbers, the better your credit worthiness and the more likelihood you’ll be approve of credit and the more favorable your interest rate will be.
In a nutshell, understanding your FICO score can help you understand the type of loan you should be able to acquire. This means if an auto dealership’s finance department is giving you an unfavorable interest rates, you’ll know it. Understanding how some factors influence the score can also help you obtain the best possible score before you apply for a mortgage, in which a large difference in score can mean an extra percentage or two in the mortgage loan — potentially thousands of dollars in the long run.
FICO Scores = Credit Scores, but Credit Scores ≠ FICO Scores
This is where it gets a bit silly and confusing. You should realize that although FICO scores are a type of credit scores, not all credit scores provided out there are FICO scores. The exact algorithm used by Fair Issac in computing FICO scores are a closely guarded secret, and because of this credit scores from other sources are not the same as FICO score, even if they are similar in numbering ranges.
Getting a “FAKO” score (a score not computed by Fair Issac) from Company X is mostly a waste of money. If a particular lender does not use the score you obtain, then your scores are pretty much worthless. It’s like running to the creditor saying: “But Bob says my credit score is 1,000!” Pretty silly when the creditor doesn’t know or care who Bob is.
Fair Issac claims that 90% of the largest U.S. banks use FICO scores. Whether your actual prospective lender uses FICO score as a factor or not is up to them, though at the end FICO scores are a good indication, and one of the industry standard in knowing where you stand in terms of credit worthiness.
myFICO FICO Scores Review
myFICO.com’s FICO Deluxe / Complete
Price: $47.85 (one-time purchase)
Promotional Code: FICO25 for 25% OFF
What you get:
- All 3 credit scores & report.
- Viewable for 30 days from date of purchase.
- Explanation for factors affecting each of your scores.
Buying the score is fairly straight forward. You click on purchase, input the discount code, fill out your personal information and pay Fair Issac via credit cards. You’re require to open an account so you can log-in and view the scores and report, all standard stuff.
Before you receive your report and scores, you’ll be asked a series of question based on your credit history, to determine your identity. In the event that they’re unable to verify your identity online, you can call a number provided on-screen, in which a service representative will confirm your identity.
I. The FICO Scores
The website interface is pretty easy to navigate. Upon log-in, you’ll be presented with your FICO score and the date the scores are obtained. Next to the score is a spiffy certification-for-the-real-deal.
The Login Page
Clicking on each of the score will bring you to the FICO Score summary page. You can check out an example of such a page here. The FICO Score page explains in detail what the score means to you, it will basically tell you how good or bad your credit is, and how likely it is for you to obtain credit base on the scores. There is also a summary of factors that affect your score, in which the positive and negative factors are listed and briefly explained.Clicking on the “Top Positive Factors” and “Top Negative Factors” page will give you further details on the factors that affect your score. For FICO score newcomers, this page can be pretty informative, especially for those taking steps in improving their credit.
Your FICO Score Page
How Lenders See You Page
The “How Lenders See You” page is another informative page, giving you a low down of how you are seen in the eyes of lenders. This includes your risk factor and a ball park interest rate for various different type of installment loan. Examples listed are a 30 year mortgage; a 15 year home equity loan; and a 48 month auto loan.
The interest rate numbers provided on this page appears to be up-to-date and sourced on the day you purchase the score, as my numbers are clearly higher than the one shown in the example page. Also in the “How Lenders See You” page, Fair Issac provides you with an extreme example of how your credit score can affect the rates you pay: If you score dropped from 792 to 510, you would pay $464 more each month in interest.
The last tab within the FICO score section is the “FICO Score Simulator.” The simulator provides an estimated score base on a list of what-ifs, such as “what if you pay down your balances on your credit card.” You can also click on the “simulate best action” button to see which action might result in the best improvement of your score. The simulator is pretty basic, with no-brainer what-ifs such as “what if you max out your credit cards.”Overall, the FICO score section is informative. Each of the information presented to you is accompanied by a decent amount of explanation to help you better understand the factors that influence your score.
The credit reports provided by myFICO.com are woefully basic and lacking in information. The first few tabs are self explanatory. “Negative Items” show things such as bankruptcy, collection, and delinquencies — if any. The “Inquiries” section shows the number of recent inquires resulting from you apply for credit. You should note that shopping for the best auto or home loan within a certain time period will not result in multiple hits of inquires to your credit report.
The “Accounts Summary” page simply lists a few stats that are important. You’ll see the number of accounts you have, the number of accounts with balances, number of accounts that are negative, the total balance on all accounts, and the length of credit history.
Clicking on each of the accounts listed will show you a wee bit more information on each account. You will see information such as the type of account (revolving or installment), the credit limit or high balance on the account, the minimum monthly payment or the terms of the account.
There isn’t much that can be mentioned about the credit report section of myFICO.com. Compare to the individual reports you receive straight from each credit reporting agency, the report shown on myFICO.com is a definite reader’s digest version.
Take the inquiries section for example. In the myFICO.com report, you only given the hard inquiry information, while soft inquires are not listed. Compare to a report from a credit reporting agency, the credit reporting agency may show you all the soft inquiry within the past year.
Because myFICO.com utilizes one interface for all three different report, some of the information provided (such as credit limit and high balance) may be unclear and difficult to compare. To really get a clear look at your credit report, especially for the task of fixing potential mistakes, you are much better off requesting each individual report from each of the respective credit reporting agency. Don’t forget they’re available free once per year.
III. Different Scores?
As you can see from the picture above, my Equifax and TransUnion score are different by about 28 points — although a fairly significant amount in terms of FICO score, for my particular situation the score difference aren’t too striking.
One of the advantages of obtaining your three FICO score is the ability to quickly see the possible differences in your credit report. As the scores are computed base on the credit report from each perspective agency, the resulting score can show you which report may be similar and which report may differ greatly.
In my situation, the extra 28 points can be attributed to one authorize user account that’s shown on the Equifax report, but not on the TransUnion report. The inclusion of this one account resulted in an extra $15,000 difference in credit limit, and also a difference of almost 11 years in credit history. A pretty significant difference!
If you want to read more about the importance of different credit score, you should check out the related post linked below.
IV. No Report, No Scores
There’s a certain caveat you should know about getting your FICO score from myFICO.com. If for whatever reason a credit reporting agency has blocked off your ability to receive a credit report online (thereby forcing you to request the report by snail mail), Fair Issac will also be unable to get you the score from that particular agency, since the scores are dependent upon the information within the report.
This is the reason why my scores from Experian are not shown above, because Experian has recently prevented me from obtaining my credit report via the online method.
When you try to purchase all three score in a situation like this, you’ll receive an unable to confirm identity message from myFICO. If calling the number provided doesn’t resolve your problem, you can simply try ordering each score individually to see which of the agency may be the source of the problem.
V. Not The Only Factor
You should know that although FICO scores are one of the more widely used scores by large US banks, it is NOT the only factor a lender use to determine your credit worthiness! Just because you have ass kicking FICO score does not mean you’ll never be rejected for credit. Besides other factors such as income and actual credit history, many large banks also have their own scoring system in determining credit worthiness.
Overall Impression and Conclusion
The expensive price tag, when compare to other available credit score can be attributed to the fact that FICO scores can mostly only be obtained from Fair Issac. If you were already planning on getting your credit score, you should obtain them from myFICO, as scores from other sources may not pertain what-so-ever in the eyes of your potential lenders.
If you have never, ever, taken a peak at your FICO score before, the price tag may be a fair deal — especially if you read all of the information provided to you. The FICO Score pages do a great job explaining the details of a FICO score, specifically, your FICO score.
For the people that are improving their credit, scores from myFICO can be a great indicator of how well you’re doing in your credit fix. You should note that fixing bad credit takes time, and forty bucks can add up quickly over time; so you should request your score in moderation, and only when you know significant changes have been made to your credit history (e.g. bankruptcy finally removed from your credit report).
Other people that will find FICO scores extremely helpful will be those shopping for a home or auto loan. Knowing your FICO score will insure that you’re less likely to accept unfavorable loan terms due to lack of information.
If you already know your FICO score and have not made any significant changes to the way you manage your credit, than you definitely don’t need to obtain your FICO scores.
If you’re buying the FICO scores for the credit report, you will be sorely disappointed. The information provided are basic at best — they’re more of a tacked-on bonus, which makes the scores themselves even more expensive. Remember, you can always obtain credit reports for free once per year.
Finally, if you’re running a crappy personal finance blog and have finally ran out of crap to make fun of, and you decided to actually provide some information to your readers (specifically a review on myFICO.com), you will most likely have to shell out the dough for the scores.
- Scores are the real deal
- Scores are more relevant compare to other offerings
- Great information for beginners
- Helpful gauge in credit improving process
- Helpful guide in shopping for auto/home loans
- Come on, $47.85? (or $38.28 with discount)
- Too little credit report information
- At the end, just one of many other factors
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