myFICO and FICO are two names for two different but related credit scoring systems. FICO stands for Fair Isaac Corporation, which is the company that developed the FICO credit scoring model. myFICO is a consumer division of FICO that offers credit scores and other services to the consumers directly.
Although both are from the same company and myFICO also offers FICO scoring models used by lenders, the scores are not always the same. Lenders use several different FICO scoring models for particular lending decisions. The scores offered by myFICO are not the actual scores that lenders look at but rather are the teaching scores to inform the consumers.
FICO Scoring Models
It must be noted that FICO has developed a number of different credit scoring models, which are utilised by lenders to arrive at credit decisions on applications. Some of the most commonly used FICO scores are:Some of the most commonly used FICO scores are:
FICO Score 8: This is the latest version of FICO credit scores, which is popular among lenders today due to its ability to deliver more accurate credit risk predictions. FICO Score 8 model of credit score is between 300 and 850.
FICO Auto Score: This model is particularly used by auto lenders in making prognosis of the probability of a borrower repaying an auto loan. The score ranges between 250 and 900.
FICO Bankcard Score: This model was developed for credit card lenders with score from 250 to 900.
FICO Mortgage Score: Mortgage lenders apply this risk scoring model which is specific for mortgage borrowing and varies from 300 to 850.
These FICO scores are computed uniquely for every industry of lending and they use different credit report data that relates to that type of lending. This means a consumer can have several different FICO scores at one time depending on which model is used.
What is MyFico Credit Score?
myFICO is the consumer arm of FICO that deals in credit scores, education and other services to the consumer. Consumers can get to know of their 28 FICO Scores through myFICO, though these are only educational scores to showcase credit profile.
The 28 FICO Scores offered by myFICO reflects auto lending, banking card lending, mortgage lending, and general lending models. However, the scores are not necessarily the actual scores that real lenders may use to approve or reject credit. Instead, they inform consumers about how lenders may consider their credit risk level based on the FICO models.
For instance, one may have a FICO Score 8 of 720, which is based on credit information from Equifax using myFICO. However, a credit card lender who uses the same Equifax report may arrive at a FICO Bankcard Score of 740 for credit decision making.
Although the 28 FICO Scores from myFICO can give reasonable approximations of lending-specific scores, actual lender scores may vary slightly depending on the report used, the model version and date used to gather the score, and the criteria of the lending institution.
Main Differences Between myFICO and FICO Scores
There are some important differences between the educational credit scores provided by myFICO compared to FICO scores used by lenders:There are some important differences between the educational credit scores provided by myFICO compared to FICO scores used by lenders:
myFICO scores are different from the lender FICO scores as myFICO scores are used for educating people about credit while the lender FICO scores determine loan eligibility.
For one, different lenders may utilize different FICO score versions than what is available on myFICO.
FICO scores can also differ for the same person based on different kinds of loans at the same time.
Hence, the same person will have different FICO scores depending on the lender since credit reports and the scoring model versions may vary.
These educational myFICO scores provide the approximate credit score the actual lender FICO score may differ a little.
Should You Check your myFICO Scores?
It is very useful to get a snapshot of your current state of your general credit health based on your latest 28 FICO Scores on myFICO when you are applying for auto, mortgage, credit cards, or other types of loans. It is important to know that having a myFICO score shows the degree of change in your credit rating either positively or negatively.
Although the 28 FICO Scores may not be the actual FICO Scores that lenders use, it provides close estimations based on the same FICO models. This way consumers are able to get a clear picture on how positive or negative their credit rating looks like currently. A much higher or lower myFICO score suggests to the consumers that actual lender FICO scores are probably moving in the same directions too.
If you have very high myFICO scores, then you are sure that when you apply for new credit, the lenders will probably report high FICO scores as well. However if your myFICO scores are low or falling, this means that you may require to take certain steps to correct your credit status before applying for loans in order to increase your chances of approval.
Displacing traditional credit score reporting, myFICO offers consumers direct access to 28 FICO credit scores derived from the same models used by the lenders and encourages people to learn more about their credit risk rating in the current economic environment at the time of big borrowing.
