You may have pulled your credit report and paid extra to see your credit score. Perhaps you were happy with it; maybe you expected it to be higher.
What few people realize is that the credit bureaus do not supply you with an actual credit score. It does not match the score supplied to lenders who make the actual lending decisions based on that score. This disclosure is buried in the fine print provided by the credit bureaus.
The score that you purchase is only an indicator of what your actual credit score likely is. It is simply a consumer product, and the bureaus go to great lengths to ensure that you cannot predict how your actual credit score is calculated.
To make matters more complicated, credit bureaus actually supply lenders with several varieties of credit scores that are all based on different formulas. You might actually have several different credit scores at each bureau, none of which match the score that you purchased.
You can test this by purchasing your credit score prior to having a lender pull your credit report for you. Just make sure you are getting a score from the same credit bureau that the lender will use. By the way, my test showed that my actual Beacon Score was 15 points lower than my Score Power Score. I purchased my score an hour before the lender ran my credit history.
As you can see, you cannot obtain a real credit score unless you allow a lender to run it for you. This can be an option, although their pull will lower your score by an average of 1 to 5 points. Doesn’t that defeat the purpose?
Wow. Really something new. Though I always read fine prints. Hmm. And what is your solution?
Most people do not read fine prints, which could be one source for their credit woes.
There is no good solution. Credit bureaus intentionally hide the credit scoring formula so that it is harder for consumers to manipulate their scores. It also makes it easier to tweak the formula without the public necessarily realizing the changes.
The main point is that consumers should not initiate a credit application believing that their credit score is exactly what their consumer product score states. They may not get the rate they expected.