The three major credit bureaus use their own version of FICO scoring model. These three companies are Equifax, Experian, and TransUnion. Equifax uses BEACON scoring model while Experian uses Fair Isaac Risk Scoring Model and TransUnion has the Empirica Scoring Model. As all these three versions of scoring models are different from each other, they come up with different credit scores. Therefore, every US citizen has three different credit scores, generated by three different bureaus.
- Payment History - One of the most important factors is your recent payment history. It accounts for 35% of your total score. It is based on payment information on all types of accounts like credit cards, retail accounts and details on late or missed payments. It also considers public records like judgments, suits or bankruptcies and collection items.
- Amount You Owe and Available Credit - This is the second most important factor - your outstanding debt. This accounts for 30% of your total score. It considers the information regarding the amount owed on all accounts, information related to the accounts showing balances, how much total credit line is used, etc. Here one thing which must be remembered is that carrying of debt does not necessarily mean that you have low credit score. In fact, people with higher scores use their credit sparingly and keep their balances low.
- Length of Credit History - The longer you have had credit, the greater will be your score. This accounts for 15% of your total credit score.
- New Credit - The opening of several credit accounts in a short period of time hampers the credit scoring of an individual. This accounts for 10% of the total credit score.
- Types of Credits in Use - This accounts for 10% of your score and considers the range of credit types, you have availed and the total number of accounts you have.