Free Credit Score

When you say credit score this is about an individual’s creditworthiness. It is measured based on the statistical analysis of a person’s credit background that usually come from credit bureaus such as Experian, TransUnion and Equifax. Several credit scoring techniques exists such as reduced form credit models, logistic regression or linear regression, hazard rate modeling and weight of evidence models.

Main difference among these models is about the assumptions needed for the variables and the capacity to model binary versus continuous outcomes. Among these techniques some are superior in the direct estimation of the probability of default. However, despite thorough research from various institutions there has been no technique that is considered superior for predicting the default in every circumstance.

Often creditors will make decisions to lend a person some money based on the credit score. In fact credit scores are used to determine who qualifies for a loan, what the interest rate and credit limits are. At the same time, credit scoring is used not only in banks but in other organizations including insurance and mobile phone companies, employers, and even government agencies use the same methods.

The system of credit scoring may vary from country to country. In the United States, various methods are used to calculate the credit scores. The most widely accepted way of computing for credit scores is the FICO which was developed by the Fair Isaac Corporation.

Many mortgage lenders use this risk-based system to find out if the borrower will fail to meet his obligations to the mortgage lender. On the other hand, credit bureaus have their own version of credit scores. There is ScorePower for Equifax, PLUS score for Experian and the TransUnion credit score.

Americans can have one free credit report within a year from each of the three credit bureaus. These same three credit agencies run the from where people can get a free credit report but without the credit score. Anybody who is interested with including the credit score on the credit report is required to pay a fee.

Although some say that there is an actual free credit score that you can get specifically in the FICO website, understand that this is only for a trial period. On the other hand the three credit bureaus also sell the VantageScore credit report.

This is another generic credit score model that differs from FICO specifically in terms of calculating the credit score. Some say it can simplify and enhance the credit process for consumers and lenders alike by scoring consumers more accurately. Another way a person can obtain a credit score is by requesting it from national consumer reporting companies. Keep in mind you can’t have a free credit score because you still have to pay an $8 fee to find out what you credit score is.

To put it more accurately there is no such thing as a free credit score however consumers are still required to acquire their credit score especially in cases where they were denied by credit grantors.

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