Know the Difference Between Credit Report And FICO 

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Difference Between Credit Report And FICO

The difference between credit report and FICO score is the analysis of the credit pattern and the assignment of a score based on the pattern. A credit report has a detailed analysis of a customer’s credit pattern from the date of credit availability and final credit repayment. At the same time, FICO offers a score based on the creditworthiness of any individual.

Protecting a customer in monetary transactions, money lending process and improving cash flow is often a difficult task in a developing or developed nation.

This crucial role of helping clients with a proper set of guidelines and rules becomes a difficult task for an institution or organization.

Having taken the learnings and positive results of the scenario above, a concept of credit emerges. There are two parties involved in the credit process, and the assigning authority will usually be a bank.

Suppose a client approaches these institutions or organizations or banks assigned to generate the credit and delegates the same to the next authority. In that case, there will be certain process checks and detailed parametric report cards available.

This report card provides complete information about the client’s credit history, the time the credit was assigned, and the payment date.

If the report is positive on the client’s credit history, he will receive the credit. Otherwise, he will be rejected.

There will be scores even on the report card that determine the credibility and status of the transaction that the lending authority can rely on to generate credit.

Credit Report vs. FICO Comparison Table 

 

Reporting authorities

It is always the governing council that is a bank

It is governed by the FICO company.

Analysis pattern

It is a detailed document that has the inputs and outputs of the credit history.

It is a three digit score.

Method

It is a process-oriented report on a customer’s total transaction details for the last 36 months.

It is a method of measuring a person’s credit worth.

scores

Does not have a punctuation pattern

It has scores ranging from 300 to 850.

reporting

It has full details of location, bankruptcy, etc.

It only has a score assigned based on the analysis

What is the Credit Report? 

A credit report is documented proof of a person’s credit history, properly prepared by the credit bureau.

The credit bureau prepares the credit report. They take into account various data to determine solvency.

This ‘creditworthiness’ is documented as a credit report. Financial institutions or any lender use this report to verify with the applicant whether to offer a loan or not.

The reporting companies systematically prepare the report. They collect all the necessary information about the person’s financial transactions.

It also includes bill payment habits. With the help of all the information, the credit report is prepared.

There are four main divisions in a credit report.

  1. Personal information: client name, addresses, employers.
  2. Accounts: This includes loan accounts up to credit card accounts.
  3. Inquiries: This is an important division. It indicates which companies have examined data from particular applicants to offer loans.
  4. Public Records: This division will present any bankruptcy information.

If a customer’s credit report has an extended history of credit repayments, this will affect the scores for which a negative score could be assigned.

If the reports are positive, the client obtains credit cards and loans as soon as an optimistic note is applied.

What is FICO?

A FICO Score can be a three-digit variety that supports data from your credit reports. Helps lenders confirm if a loan can be repaid. This determines the status of the loan and also the repayment status.

FICO scores provide a quick and reliable method of deciding whether or not to offer a loan. In most cases, they will review your FICO Scores.

The FICO score is the snapshot of what a credit report is. It is a concrete measure of a person’s solvency in the loan market.

A FICO score will make it easier for lenders to make smarter, faster choices about which World Health Organization they lend cash to, but it will also help people like you gain honest and quick access to credit once you’re ready, whenever you want.

FICO was born 30 years before it helps lenders and borrowers. Many other scores were available before FICO existed.

The FICO score helps people get loans faster. This can be for education, personal emergency, or much more.

The fact is, a decent FICO Score will save you a lot of money and energy. It is a good way to determine a person’s credit rating, also in a faster way!

Main Difference Between Credit Report And FICO 

  • The main difference between Credit report and FICO Scores is the pattern of an individual’s score based on the customer’s past credit history; however, the credit report focuses only on the generation of the report, while FICO scores focus on the scoring pattern of each category.
  • FICO scores are ranked by category, and a single percentage is given to each category, but the credit report provides an overview.
  • FICO scores have the authority to extend credit or deny it, but the credit report doesn’t specify anything about it.
  • The credit bureaus determine credit report factors, and the FICO company determines the factors of FICO scores.
  • The option to get a free credit report is available with reporting agencies, but this will not apply to FICO scores, as scores are generated based only on transactions made.

Conclusion

A credit report has all the details of the customer’s past transaction history from the time the credit is obtained to the time the credit is repaid and will be classified for future reference.

The FICO score is a three-digit number that helps determine how much a customer pays for credit, affecting virtually any expense.

Many US lenders use a type of credit score called a FICO score, which has the total transaction history in a single three-digit number that predicts how likely a customer is to repay the credit or not.

By having a high credit score and a better credit report with a good FICO score, the customer can take advantage of a strong combination of all facilities in a better convenience option.

Word cloud to differentiate between a credit report and FICO

The following is a compilation of the most commonly used terms in this Credit Report and FICO article. This should help you remember related terms as used in this article at a later stage.

Reference : https://www.pndaccountants.com.au/service/taxation-services/

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