Today's lesson, Racism. If you see something written here that you’ve said or done, use it as an opportunity. Take it as a wake up call and make the decision to grow, change and be conscious of your own privilege. Remember, I am not a speaker for the entirety of a people.
Last week, there were questions about other credit scores that are available. Yes, there are other scores. No, they are not something you should worry about or even look into.
The FICO score is the score that decides your interest rates, your credit worthiness and your credit reputation.
As far as the other credit scores, well, this gets tricky and in some cases, down right frustrating. I won’t be spending much time on this because I would actually like to discourage people from looking into other scores.
Okay, here’s the thing, looking into other types of scores won’t hurt you or your credit. It isn’t necessarily a bad thing to do. It’s just a confusing, non necessary thing to do. I’ll be honest here, the reason I am not a fan of any other score is because they cost money and they don’t matter. Why pay for something that isn’t going to help you? If you are a curious kind of person and just want to see them and have some extra money laying around, go for it. I’m just not a fan of spending money for nothing.
The reason FICO is the nationally recognized credit scoring system is because they are a third party system that works WITH the credit bureaus but not FOR the credit bureaus. Plus, these other credit scores can be found regionally, locally (Within any given state) and even on a per business basis. There are hundreds of types of credit scores out there. No joke. I personally find it quite irritating. For now, the one I want to focus on is the one that I was asked about last week. Experian. Last week I told you that Experian no longer offers a FICO score. This is true. However, they do offer their own scoring system. You can purchase a score from Experian. It wouldn’t hurt you in any way to do this but I want to stress up front, there isn’t much (if any) benefit to spending this money.
Okay brutal honesty time: When Experian decided to no longer work with the FICO company, there was a huge uproar in the credit world. The reason is because the entire point of the FICO company was to keep things even and balanced with no ulterior motives when it came to your credit score. They had nothing to gain by making one credit bureaus’s score look better than another. They are completely unbiased. This is why they are used nation wide.
Note: I have no reason to believe that Experian is doing anything unethical with their scoring system.
With that said…
Part of the uproar of them choosing to no longer work with FICO came from the possibility that they could fudge numbers if they wanted to. Again, I want to stress, I have no reason to believe they are doing this. The thing is, if your credit report, credit score and possible credit score raising products (wink wink) are all being housed at the same company, there is a very real possibility that they can legally claim that if you buy such-and-such score raising product, you are guaranteed to see a raise in your credit score. Then, maybe, just maybe they’ll change the way the score is calculated and wallah! Your score goes up.
I HAVE NO REASON TO BELIEVE THIS HAS EVER HAPPENED WITH EXPERIAN.
However, it is a very real concern.
On top of all of this, Experian’s score is not a nationally recognized score. «This is why I said, why buy it if it can’t help you?