ARE YOU FUNDABLE , OR DO YOU JUST HAVE A GOOD SCORE ? MERRILL CHANDLER
So while you have been trained by the financial world to be score sensitive , no one has taught you the difference between FICO ® and FAKEO™ scores . If it does not have the FICO ® registered trademark it is not a legitimate score — NO lender will lend on it . I hate ( not really — just being polite ) to inform all of you that the credit scores offered on sites like CreditKarma . com , etc . are FAKEO™ scores and are not used by lenders to extend you credit . The best place to acquire your true FICO ® credit scores is myFICO . com . It offers both unweighted and industryspecific scores . Another feature to the credit report you get from myFICO . com is that it also contains credit scores calculated using various versions of the FICO ® scoring software so that you can see what the lenders see — regardless of which software version a lender uses .
Whaaaaa ?
As with all software , there are versions that are more recent and and there are versions that are older . The challenge is that when you go to a lender and submit an application , you do not know what version of the FICO ® software they are using . To add insult to injury , when you pull your myFICO ®. com credit report , you will see that there can be as much as a 20 to 70 point difference between scores generated by the different software versions . And each version grades the exact same data on your credit profile !
What ’ s more disturbing still is that lenders do not educate borrowers about the complexities of credit so that they can make intelligent borrowing decisions . Of course , we are not schooled in these credit vagaries . We are told only to pay our bills and we ’ ll have a good credit score . The secret is that “ paying your bills ” on time is only one of 40 activities on your credit profile that FICO ® measures . Once again , our ignorance of those other 39 criteria leaves us in mystery as to how to positively affect our fundability and our credit approvals .
The second contributing factor to your fundability is the quality of your credit profile . Your credit profile breaks down into five distinct areas : your identity , your revolving accounts portfolio , your installment loans portfolio , inquiries , and derogatory or negative indicators ( late pays , collections , liens , judgments , and other types of score limiting data ). Let ' s take these one at a time .