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Experian Credit Score vs FICO

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When you think “credit score,” you probably think “FICO.” The Fair Isaac Corporation introduced its FICO scoring system in 1989, and it has since become one of the best-known and most-used credit scoring models in the United States. But it isn’t the only model on the market.

Another popular option is called VantageScore, the product of a collaboration between the three major credit reporting agencies: Experian, Equifax, and TransUnion. It uses similar scoring methods to FICO but yields slightly different results.

Each scoring model has multiple versions and multiple applications—you don’t have just one FICO score or one VantageScore. Depending on which bureau creates the score and what type of agency is asking for the score, your credit score will vary, sometimes siginifcantly. One credit score isn’t more “accurate” than another, they just have different applications. Learn more about the different types of credit scores below.

When you sign up for ExtraCredit, you can see 28 of your FICO scores from all three credit bureaus. Your free Credit Report Card, on the other hand, will show you your Experian VantageScore 3.0.

What Is a VantageScore?

VantageScore was created by the three major credit reporting agencies—Experian, Equifax, and TransUnion. It uses similar scoring methods to FICO but yields slightly different results.

One of the primary goals of VantageScore is to provide a model that is used the same way by all three credit bureaus. That would limit some of the disparity between your three major credit scores. In contrast, FICO models provide a slightly different calculation for each credit bureau, which can create more differences in your scores.

FICO vs. VantageScore

So, what are the differences between an Experian credit score calculated using VantageScore and one calculated via the FICO model? More importantly, does the score used matter to you, the consumer? The answer is usually no. But you might want to look at different scores for different needs or goals.

Understanding the Scoring Models

FICO and VantageScore aren’t the only scoring models on the market. Lenders use a multitude of scoring methods to determine your creditworthiness and make decisions about whether or not to give you credit. Despite the numerous options, FICO scores and VantageScores are likely the only scores you’ll ever see yourself.

Here’s what FICO uses to determine your credit score:

  • Payment history. Whether or not you pay your bills in a timely manner is critical, as this factor makes up around 35% of your score.
  • Credit usage. How much of your open credit you have used—which is called credit utilization—accounts for 30% of your score. Keeping your utilization below 30% can help you keep your credits core healthy.
  • Length of credit. The average age of your credit—and how long you’ve had your oldest account—is a factor. Credit age accounts for around 15% of your score.
  • Types of credit. Your credit mix, which refers to having multiple types of accounts, makes up around 10% of your score.
  • Recent inquiries. How many entities have hit your credit history with a hard inquiry for the purpose of evaluating you for credit is a factor for your score. It accounts for about 10% of your credit score.

VantageScore uses the same factors, but weighs them a little differently. Your VantageScore 4.0 will be most influenced by your credit usage, followed by your credit mix. Payment history is only “moderately influential,” while credit age and recent inquiries are less influential.

Each company also gathers its data differently. FICO bases its scoring model on credit data from millions of consumers analyzed at the same time. It gathers credit reports from the three major credit bureaus and analyzes anonymous consumer data to generate a scoring model specific to each bureau. VantageScore, on the other hand, uses a combined set of consumer credit files, also obtained from the three major credit bureaus, to come up with a single formula.

Both FICO and VantageScore issue scores ranging from 300 to 850. In the past, VantageScore used a score range of 501 to 990, but the score range was adjusted with VantageScore 3.0. Having numerical ranges that are somewhat consistent helps make the credit score process less confusing for consumers and lenders.

Your score may also differ across the credit bureaus because your creditors aren’t required to report to all three. They may report to only one or two of them, meaning each bureau likely has slightly different information about you.

Variations in Scoring Requirements

If you don’t have a long credit history, VantageScore is the score you want to monitor. To establish your credit score, FICO requires at least six months of credit history and at least one account reported to a credit bureau within the last six months. VantageScore only requires one month of history and one account reported within the past two years.

Because VantageScore uses a shorter credit history and a longer period for reported accounts, it’s able to issue credit ratings to millions of consumers who wouldn’t yet have a FICO Score. So, if you’re new to credit or haven’t been using it recently, VantageScore can help prove your trustworthiness before FICO has enough data to issue you a score.

The Significance of Late Payments

A history of late payments impacts both your FICO score and your VantageScore. Both models consider the following.

  • How recently the last late payment occurred
  • How many of your accounts have had late payments
  • How many payments you’ve missed on an account

FICO treats all late payments the same. VantageScore judges them differently. VantageScore applies a larger penalty for late mortgage payments than for other types of credit payments.

Because FICO has indicated that it factors late payments more heavily than VantageScore, late payments on any of your accounts might cause you to have lower FICO scores than your VantageScores.

Impact of Credit Inquiries

VantageScore and FICO both penalize consumers who have multiple hard inquiries in a short period of time. They both also conduct a process called deduplication.

Deduplication is the practice of allowing multiple pulls on your credit for the same loan type in a given time frame without penalizing your credit. Deduplication is important for situations such as seeking auto loans, where you may submit applications to multiple lenders as you seek the best deal. FICO and VantageScore don’t count each of these inquiries separately—they deduplicate them or consider them as one inquiry.

FICO uses a 45-day deduplication time period. That means credit inquiries of a certain type—such as auto loans or mortgages—that hit within that period are counted as one hard inquiry for the purpose of impact to your credit.

In contrast, VantageScore only has a 14-day range for deduplication. However, it deduplicates multiple hard inquiries for all types of credit, including credit cards. FICO only deduplicates inquiries related to mortgages, auto loans, and student loans.

Influence of Low-Balance Collections

VantageScore and FICO both penalize credit scores for accounts sent to collection agencies. However, FICO sometimes offers more leniency for collection accounts with low balances or limits.

FICO 8.0 also ignores all collections where the original balance was less than $100 and FICO 9.0 weighs medical collections less. It also doesn’t count collection accounts that have been paid off. VantageScore 4.0, on the other hand, ignores collection accounts that are paid off, regardless of the original balance.

What Are FAKO Scores?

FAKO is a derogatory term for scores that aren’t FICO Scores or VantageScores. Companies that provide FAKO scores don’t call them this. Instead, they refer to their scores as “educational scores” or just “credit scores.” FAKO scores can vary significantly from FICO scores and VantageScores.

These scores aren’t completely valueless, though. They can help you understand where your credit score stands or whether it’s going up or down. You probably don’t want to shell out money for such scores, though, and you do want to ensure the credit score provider is drawing on accurate information from the credit bureaus.

Is Experian Accurate?

Credit scores from the credit bureaus are only as accurate as the information provided to the bureau. Check your credit report to ensure all the information is correct. If it is, your Experian credit scores are accurate. If your credit report is not accurate, you’ll want to look into your credit repair options.

Our free Credit Report Card offers the Experian VantageScore 3.0 so you can check it regularly. If you want to dig in deeper, you can sign up for ExtraCredit. For $24.99 per month, you can see 28 of your FICO scores from all three credit bureaus. ExtraCredit also offers rent and utility reporting, identity monitoring and theft insurance, and more.

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California’s vague new financial regulation law – Orange County Register

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Assembly Bill 1864 didn’t get much media or public attention as it zipped through both houses of the Legislature on the last day of the 2020 session.

Superficially, it appeared merely to reconfigure the state’s financial regulatory agencies into a new entity called the Department of Financial Protection and Innovation.

However, those in California’s vast financial industry were paying lots of attention because the bill creates an entirely new regulatory regime with broad powers, including fines of up to $1 million a day, to police financial players that hitherto have had little oversight.

The official rationale for the legislation is that President Donald Trump’s administration neutered the federal Dodd-Frank Wall Street Consumer Financial Protection Act of 2010, so the state must step in with an equivalent to guard against predatory financial practices that harm consumers.

The new California Consumer Financial Protection Law gives the reconstituted agency authority to go after “abusive practices” whose definition in the law is fairly vague. Thus, the agency itself will define the term as it also decides which businesses will face its scrutiny.

It appears that the new law will affect firms involved in debt settlement, credit repair, check cashing, rent-to-own contracts, payday lending, student loan servicing and financing for retail sales. However, its primary target seems to be financial services offered by non-banks, particularly what are called “fintech companies” that offer bank-like services via the Internet without maintaining physical offices.

Fintechs, many of them based in the San Francisco Bay Area, have blossomed in recent years as part of the digital economy, competing with traditional brick-and-mortar banks. Their disruptive nature is not unlike the challenge that technology-based ride services such as Uber and Lyft pose to taxicabs and buses.

Late-blooming changes in AB 1864 exempted traditional financial firms that are already regulated, such as banks and credit unions, from the new consumer protection law, leading some analysts to conclude that its unstated aim is to help them stave off competition from new kids on the financial block.

The vagueness of the new law was encapsulated in what Gov. Gavin Newsom said during a signing ceremony. The new law and the new department, he said, will “create conditions for innovation to flourish in a way where we can steward that and we can just work against its excesses. So we support risk-taking, not recklessness.”

Newsom also signed two other financial protection measures, one that requires debt collectors to be licensed beginning in 2022 and the other creating a Student Loan Borrower Bill of Rights.

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Erie Homecoming 2020 to take place virtually

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Erie Homecoming 2020: “Erie’s Economic Evolution” is happening this week.

Erie Homecoming is an event that shares the vision of where we are going as a business community and the specific projects that will be taking us there.

Yoselin Person was live outside of the Erie Regional Chamber to tell us more about what’s taking place at this year’s homecoming.

Get your favorite hot drink because Erie Homecoming is happening virtually. 

Rooms full of people just aren’t happening in the midst of a pandemic, so Erie Homecoming is an event that will inspire you from comfort of your home or office.

The purpose of homecoming is to give attendees the opportunity to learn how they can invest in the Erie community.

During this two day event, you will be able to learn how you can invest the time, talent and treasure in creating a more diverse and prosperous Erie community.

Erie’s Black Wall Street will be featured this year. It’s a nonprofit organization that’s known for improving black business.

“So, having it geared towards helping black businesses expand and spread their wings, I think that’s amazing,” said Alexandria Ellis, owner, She Vintage.

Ellis began her business six months ago. She says Erie Black Wall Street is a safe space where black entrepreneurs can connect and collaborate with others.

The organization also helps others with credit repair.

“They’ve helped me by connecting me with resources if someone is looking for a nail tech or a boutique that’s black owned, they have connected customers of their clients to me through their organization,” said Ellis.

Speakers from the black owned organization will speak about creating regional equity.

There will also be a discussion about Flagship Opportunity Zones and what it means in terms of tax and other investment incentives.

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RiverBend Growth Association announces new members | Business

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RiverBend Growth Association encourages use of face coverings

The RiverBend Growth Association announces its new members:

5 Diamond Campground

Brian Campbell and Matt Diamond

2 Fun Lane

Hartford IL 62048

(618) 254-1180

facebook.com/5-Diamond-Campground-103976501423687

Alton Pride Inc.

Jason Heeren, director of sponsorship

P.O. Box 662

Alton IL 62002

(618) 204-7420

https://altonpride.com

Alton Pride is a charitable and educational organization established to bring awareness, understanding, and advocacy to the LGBTQ+ community with an emphasis on the specific needs of the youth within the community. We are setting ourselves apart from other Pride organizations by focusing on giving back to our community, rather than hosting just a parade or festival. We will be depositing a majority of event proceeds into a structured account funding our goal to develop a local teen suicide prevention line and a teen resource center to help youth in need.

 

Imo’s Pizza – Bethalto

Lori Bromberg, president/treasurer and managing partner

515 N. Bellwood

Bethalto IL 62010

(618) 258-0011

www.imospizza.com

Bethalto Imo’s is owned by Charles and Barbara (Babs) Pelan. Barbara was a nurse and Charles has had a varied career but has always had an entrepreneurial spirit. He and Babs purchased the Bethalto Imo’s in 2013 and seeing the success of the brand and the store in Bethalto were anxious to purchase the Edwardsville Imo’s franchise in 2014.

Their daughter, Lori Bromberg, is the managing partner and provides leadership and daily oversight to the business. Lori has a bachelor of science degree in management and has 31-plus years in corporate leadership roles, including customer experience, supply chain, distribution strategy, change management, hr/talent management, training and safety. Lori also is a certified mentor for SCORE providing mentoring and coaching to small businesses.

While it is our goal to have a financially successful business, we believe the cornerstones to achieving success is ensuring a superior product and customer experience, investment in our employees, positive contributions to our community, while demonstrating a strong commitment to safety. We pride ourselves on our commitment to Imo’s corporate mission, “To maintain the Imo’s tradition of uncompromising quality, pride in Imo’s products, and passion for success and for customers to experience a genuine, original St. Louis pizza of the highest quality, served in a pleasant atmosphere or at home, so that they too will have reason to say: “Imo’s is my favorite pizza.”

If you frequent our Bethalto location, we will be moving down the street a little over a mile, still on 111, within the next month or so.  We will continue to have delivery and pick-up as well as offer new patio seating.

 

Lewis and Clark Community College Foundation Inc.

Mark Kratschmer, president

5800 Godfrey Road, ER 0210

Godfrey IL 62035

(618) 468-2010

www.lc.edu/About_the_Foundation/

The Lewis and Clark Community College Foundation is a nonprofit corporation organized under the laws of the state of Illinois. The foundation supports Lewis and Clark Community College and its students through scholarships, awards, and other assistance.

Piasa Body Art

Cody Hinkle, owner

560 E. Broadway

Alton IL 62002

(618) 462-1720

Alton’s best body art shop, offering tattoos and piercing services. Now with The Salon for all your hair care and barbering needs!

Prosper Credit Consultants

Jerheart Huntley, owner

525 Wyss Ave.

Alton IL 62002

(877) 503-7465

prospercreditconsultants.com

Credit repair that works! Prosper Credit Consultants uses the most innovative processes to make sure our clients are educated on how credit repair works! Prosper Credit Consultants is dedicated to educating our clients on how to get and keep good credit! We have become a one-stop shop for all things from credit repair, building credit for beginners, trade lines, putting our clients in position to purchase that new car, and home they want. Give us a call (877) 503-7465 or set up a free credit consultation.

The RiverBend Growth Association is the chamber of commerce and economic development organization for the 12 communities known as the Riverbend.  For more information about the Growth Association, visit www.growthassociation.com or call (618) 467-2280.

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