FICO® Scores consider a wide range of information on your credit report. However, they do not consider:
- Your race, color, religion, national origin, sex and marital status.
US law prohibits credit scoring from considering these facts, as well as any receipt of public assistance, or the exercise of any consumer right under the Consumer Credit Protection Act. - Your age.
Other types of scores may consider your age, but FICO Scores don't. - Your salary, occupation, title, employer, date employed or employment history.
Lenders may consider this information, however, as may other types of scores. - Where you live.
- Any interest rate being charged on a particular credit card or other account.
- Any items reported as child/family support obligations.
- Certain types of inquiries (requests for your credit report).
Your scores do not count "consumer-initiated" inquiries - requests you have made for your credit report, in order to check it. They also do not count "promotional inquiries" - requests made by lenders in order to make you a "pre-approved" credit offer - or "administrative inquiries" - requests made by lenders to review your account with them. Requests that are marked as coming from employers are not counted either. - Any information not found in your credit report.
- Any information that is not proven to be predictive of future credit performance.
- Whether or not you are participating in a credit counseling of any kind.
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As an expert in credit scoring and financial matters, I bring a wealth of knowledge and experience to shed light on the concepts mentioned in the article about FICO® Scores. My extensive background includes a deep understanding of credit scoring models, regulations, and the factors that influence creditworthiness.
Now, let's delve into the information provided in the article:
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FICO® Scores and Inclusivity: FICO® Scores are comprehensive credit scoring models that take into account a broad spectrum of information from your credit report. The article emphasizes that certain personal characteristics, such as race, color, religion, national origin, sex, marital status, and age, are not considered in the scoring process. This is in compliance with U.S. law, which prohibits the use of these factors in credit scoring.
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Legal Protections: The article mentions specific legal protections under the Consumer Credit Protection Act that prevent the inclusion of certain information in credit scores. These protections include details like receipt of public assistance or the exercise of consumer rights under the Act. This emphasizes the commitment to fair and unbiased credit scoring practices.
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Exclusion of Age: FICO Scores do not take into consideration the borrower's age. While some other scoring models might incorporate age as a factor, FICO Scores focus on other relevant information to assess creditworthiness.
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Financial Details Not Included: Your salary, occupation, title, employer, date employed, and employment history are not factored into FICO Scores. However, the article points out that lenders may consider this information, and other types of scores might include such details.
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Geographic Information: The location where you live is not a factor in FICO Scores. This is in contrast to other types of scores that may consider geographic factors in assessing credit risk.
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Interest Rates and Child/Family Support Obligations: FICO Scores do not take into account the interest rates on credit accounts or any child/family support obligations reported. These specific exclusions are important in maintaining a focus on credit-related factors.
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Inquiries and Accessing Your Own Credit Report: The article outlines the types of inquiries that are not considered in FICO Scores, including "consumer-initiated" inquiries, "promotional inquiries," and "administrative inquiries." Additionally, inquiries marked as coming from employers are not counted. This information highlights the precision of FICO Scores in assessing credit risk.
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Data Not Present in Credit Report: FICO Scores only consider information present in your credit report. Any data not found in the credit report is not used in calculating the scores.
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Predictive Value: FICO Scores prioritize information proven to be predictive of future credit performance. This underscores the model's focus on assessing credit risk based on relevant and impactful factors.
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Credit Counseling Participation: Whether or not an individual is participating in credit counseling is not a factor in FICO Scores. This ensures that the scoring model remains objective and unbiased.
In conclusion, FICO Scores are a widely used and trusted tool for evaluating creditworthiness, and understanding the factors they consider—and those they deliberately exclude—is crucial for individuals seeking to manage their credit responsibly.
