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Topics addressed on August 8, 2007:
The difference between PLUS scores and FICO scores
What is the difference between a “Plus” score and a “FICO” score? On a June credit report from Experian my Plus score was 790 (330-830), while my FICO score with Experian was 889 (300-850). I realize both scores are excellent, but I would like to understand it further.
The Plus score and the FICO score are two different scores developed by two different companies with two different scales.
The Plus score was developed by Experian Decision Analytics, the credit score developing business owned by Experian. The Plus score scale is 330 to 830.
FICO scores are developed by Fair, Isaac Corporation, hence the term FICO. There is not just one FICO score. Your question points out that fact very clearly. You can’t have a score of 889 if the scale only goes from 350 to 850.
Fair, Isaac Corporation specializes in developing credit scoring systems for lenders and other businesses. The original or “classic” FICO scores had scales that went from about 350 to about 850. The company’s newest scores, called the FICO Next Generation, or NextGen scores, have scales with a high score of 950, so that may have been the model that resulted in your score of 889.
In fact, there are many different credit scores used by lenders and other businesses, with a wide range of scales, some estimate more than 1,000. I’m often asked why there isn’t just one credit score. Cars make a simple, clear analogy.
Imagine two four-door sedans. They are about the same size, have the same number of doors, gasoline engines that produce about the same amount of power, four wheels and a steering wheel. So, why does a person choose one over the other? It is because of small differences in the designs that make one car better suited overall to their particular needs.
The same is true of credit scores. All credit scores use the same information from your credit report, but they treat the information slightly differently to meet the needs of the particular lender. You can have two different numbers that both indicate you are a very good credit risk because different models have different score ranges.
That is why I caution people to not get too caught up in the number. The number alone only has meaning to your lender and only to that particular transaction. The credit scores you receive online provide great educational value and give you a very good idea of how lenders will view your creditworthiness.
But, you can’t buy a score online, take it to a lender and expect the lender to use the score to approve your application. They simply can’t use the score you bring them to make a lending decision because they very likely use a different one even if the score you purchased is from the same credit score developer.
Instead of the number, concentrate on where your score falls in the range of risk for that model and on the risk factor statements that accompany the scores. If your lender provided the scores, it also might be able to give you the risk factor statements that accompanied the scores. If you purchased the scores, you received a list of what from your credit history most influenced those scores.
Those risk factor statements describe what you must address in your credit history to become a better credit risk. You will likely find that a number of the statements are very similar if not identical from one score to the other.
Focusing on those issues from your credit history will help you improve your creditworthiness over time.
In your case, the statements won’t be of great significance and may indicate there is no one factor having a major impact. That is because your credit is very good and there is little room for improvement. You already qualify for the best rates and terms.
Simply having credit carries with it some risk, and that risk, however small, will be reflected in the scores you receive. That is why it is almost impossible to get a perfect credit score.
Thanks for asking.
- The "Ask Experian" team