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Calculating You Credit Score
In addition to the credit report that's compiled by each of the three reporting agencies (aka credit bureaus), each also calculates your credit score.
This is the number that many creditors use to quickly make decisions about whether or not to grant you credit or approve a loan.
Although you're entitled to a free copy of your report every 12 months, the reporting agencies are not obligated to provide you with your score for free. Instead, they charge you to obtain it.
At the time you request a free copy of your report, you may receive an offer to purchase your corresponding score and receive the report and score at the same time. For this, you'll be charged approximately $6 per score.
Your credit score is sometimes referred to as your FICO Score. FICO is a registered trademark of Fair Isaac Corporation (NYSE:FIC), the pioneer of the FICO credit score that's used by many lenders to evaluate consumer credit risk.
According to the company's web site, "Credit reporting agency risk scores produced from models developed by Fair Isaac Corporation are commonly known as FICO Scores, Fair Isaac credit reporting agency scores are used by lenders and others to assess the credit risk of prospective borrowers or existing customers, in order to help make credit and marketing decisions."
These scores are derived solely from the information available on credit reporting agency reports. Credit Score is a term often used to refer to credit reporting agency risk scores.
It broadly refers to a number generated by a statistical model which is used to objectively evaluate information that pertains to making a credit decision.
You can also contact each of the three reporting agencies separately to purchase your credit score in conjunction with a report or separately.
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