| Before credit scores were developed, lenders use to | | | | thus allowing it to be more accurate. The NextGen |
| physically look over each applicants credit report and | | | | FICO is currently being widely adopted by lenders and |
| credit history to determine whether or not to extend | | | | is becoming increasingly popular in retail. NextGen FICO |
| credit. This process was highly time consuming and | | | | credit score, may be also be referred to the |
| sometimes resulted in large human errors. | | | | PinnacleSM, FICO® Risk Score or Advanced Risk |
| As a result, Fair Isaac created the credit scoring | | | | Score. |
| formula to help lenders make better judgments more | | | | Industry Specific FICO Score |
| quickly. The credit scoring formula looks at many | | | | As the name suggests certain industries have specific |
| variables such as total debt to income ratio, types of | | | | FICO credit scores. Normally these scores are |
| debt, number of late payments and other variables. | | | | developed from the Classic FICO or NextGen credit |
| One thing many people fail to realize is that depending | | | | score, but they will have a little different predictive |
| on the type of loan you are applying for, you may find | | | | weighting on variables that are specific to the industry. |
| your FICO credit score differs quite drastically. The | | | | You may see industry specific credit scores for auto, |
| reason for this is that lenders use various versions of | | | | bankcard, finance and installment products. |
| the Fair Isaac FICO scores. The goal of this article is to | | | | CallScoreTM |
| provide an understanding of the different types of | | | | A CallScore is used primarily in the UK. It is designed to |
| credit scores you may see when applying for credit. | | | | keep records and measure the probability of UK |
| Classic FICO® | | | | consumers to repay their credit and not default. As |
| The Classic FICO credit score has traditionally been | | | | defined by Fair Isaac® "CallScore leverages |
| the most common type of credit scores used by most | | | | CallCredit's database of UK consumer credit profiles |
| lenders. Each year billions of lending decisions per year | | | | and demographic information, in combination with Fair |
| are being measured using the Classic FICO score. If | | | | Isaac's predictive analytic expertise, to assess each |
| you are looking for a mortgage loan, car loan, | | | | consumer's relative likelihood of default." |
| motorcycle loan or other consumer loans it is likely that | | | | Overall, consumers should understand that the credit |
| the lender will use a Classic FICO credit score. The | | | | score which are bought from the credit reporting |
| Classic FICO credit score is sometimes referred to as | | | | agencies may differ from the credit scores lenders |
| Beacon®, FICO Risk Score®, or Empirica® | | | | are using to decide the terms of their loan request. |
| depending on the credit reporting agency. | | | | The above credit score types provide consumers an |
| NexGen FICO® Risk Score | | | | overview of which type of credit scores they may |
| The NexGen FICO risk score is an off shoot of the | | | | face when applying for credit. |
| Classic FICO credit score aimed at reducing the risk of | | | | Copyright (c) 2005, by Jay Fran This article may be |
| lenders while also allowing them to increase their | | | | freely distributed as long as the copyright, author's |
| approval rate. The NextGen FICO looks at far more | | | | information and the below active live link is published |
| predictive variables than the Classic FICO credit score | | | | with the article. |