Although there are several scoring methods, the score most commonly used by lenders is known as a FICO because of its origins with Fiar Isaac and Company. Fair Isaac is an independent company that came up with the scoring method and software used by lenders, insurers and other businesses. Each of the three major credit bureaus Experian, Equifax and TransUnion worked with Fair Isaac in the early 1980's to come up with the scoring method.

The three national credit bureaus each have their own version of the FICO score with their own names. Equifax has the Beacon system, TransUnion has the Empirica system, and Experian has the Experian/Fair Isaac system. Each is based on the original Fair Isaac FICO scoring method and produces simliar numerical results for any given credit report.

 Opt-Out Credit Info

Having credit checked is an important and necessary step in the home buying process, as well as something that is done on a regular basis for any number of reasons. Few people realize that each time their credit is checked, the “inquiry data” that the credit bureau has on file has now become a commodity.  This information is being sold by the credit bureaus to other lenders.

Lenders that purchase these leads at a premium will then do everything they can to recoup their investment and turn a hefty profit.  Super sneaky bait and switch tactics are being used to lure clients away from their reputable lender.  Clients have even been called by disreputable lenders and told that the lender they had been speaking to previously “passed on” the information to them, because they knew that they’d be able to offer better interest rates and terms.  Ouch!

The good news is that you can make it stop, right away.  And pass this information on to everyone you know – your friends, family members, neighbors and coworkers.

The consumer credit reporting industry has provided a way to “opt out” and remove your name from these lists.  You can contact them at 1-888-567-8688 or online at www.optoutprescreen.com.  You must opt out at least 48 hours prior to having your credit checked to make sure it is processed in time.  You can choose a five year or lifetime option, and the lifetime option does require a signed form.  If a credit report needs to be run prior to the 48 hour waiting period – at least you are aware and informed, and can be on the lookout for suspicious phone calls or mailers from someone who has purchased your data.

BONUS: Opting out will also protect you from “pre-approved credit offers” arriving via mail…one of the leading causes of identity theft in the U.S.

If you have had your credit report already run, then be aware that the practice mentioned above is being done.  Should you receive a call from another lender, please know that your information was not given out by Homeowners Mortgage Group. 

Free Annual Credit Report

Congress established this outlet to make it easier for consumers to get their credit reports and credit scores from the three national credit reporting agencies.

AnnualCreditReport.com is a centralized service for consumers to request free annual credit reports from Equifax, Experian and TransUnion.

AnnualCreditReport.com provides consumers with the secure means to request and obtain a free credit report once every 12 months from each of the three nationwide consumer credit reporting companies in accordance with the Fair and Accurate Credit Transactions Act (FACT Act).

Credit-Scoring Myths

Closing accounts can help your credit score

Closing accounts can never help your credit score, and may hurt it. The credit score looks at the difference between your available credit and what you're using. Close accounts, and your total available credit shrinks, making your balances loom larger, which typically hurts your score. The score also tracks the length of your credit history. Closing older accounts can also make your credit history look younger than it actually is which can hurt your score. If your goal is to improve your credit score pay down your credit card debt. That's something that actually can improve your score.

Checking your FICO score can hurt your credit

Ordering a copy of your own credit report or credit score doesn't count against your scores. Applying for new credit is generally what hurts your score. If you want to minimize the damage from credit inquiries, make sure that when you shop for a mortgage you do so in a fairly short period of time. The FICO score treats multiple inquiries in a 45-day period as just one inquiry and ignores all inquiries made within 30 days prior to the day the score is computed. One credit inquiry will generally only affect your credit score by 5 points.

Do You Have Questions About Your Credit?